Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 9% simple interest?
Correct Answer
$4620
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 9%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $3000 × 9% × 6
= $3000 ×9/100 × 6
= 3000 × 9 × 6/100
= 27000 × 6/100
= 162000/100
= $1620
Thus, Simple Interest = $1620
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 = $3000 + $1620
= $4620
Thus, Amount to be paid = $4620 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 = $3000
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 9% × 6)
= $3000 + ($3000 ×9/100 × 6)
= $3000 + (3000 × 9 × 6/100)
= $3000 + (27000 × 6/100)
= $3000 + (162000/100)
= $3000 + $1620 = $4620
Thus, Amount (A) to be paid = $4620 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3000, the simple interest in 1 year
= 9/100 × 3000
= 9 × 3000/100
= 27000/100 = $270
Thus, simple interest for 1 year = $270
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $270 × 6 = $1620
Thus, Simple Interest (SI) = $1620
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3000 + $1620
= $4620
Thus, Amount to be paid = $4620 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 3 years.
(2) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?
(8) What amount does David have to pay after 5 years if he takes a loan of $3400 at 9% simple interest?
(9) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 3 years.