Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
Correct Answer
$5328
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3600 × 8% × 6
= $3600 ×8/100 × 6
= 3600 × 8 × 6/100
= 28800 × 6/100
= 172800/100
= $1728
Thus, Simple Interest = $1728
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1728
= $5328
Thus, Amount to be paid = $5328 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3600
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 8% × 6)
= $3600 + ($3600 ×8/100 × 6)
= $3600 + (3600 × 8 × 6/100)
= $3600 + (28800 × 6/100)
= $3600 + (172800/100)
= $3600 + $1728 = $5328
Thus, Amount (A) to be paid = $5328 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3600, the simple interest in 1 year
= 8/100 × 3600
= 8 × 3600/100
= 28800/100 = $288
Thus, simple interest for 1 year = $288
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $288 × 6 = $1728
Thus, Simple Interest (SI) = $1728
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1728
= $5328
Thus, Amount to be paid = $5328 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $13600 to clear the loan, then find the time period of the loan.
(2) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(4) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(5) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.
(7) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(8) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.