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) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.
(2) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?
(3) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(4) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(5) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 9% simple interest?
(6) If Anthony paid $4816 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) William had to pay $3815 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) If Barbara paid $3976 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 4% simple interest?
(10) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.