Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?
Correct Answer
$4928
Solution And Explanation
Solution
Given,
Principal (P) = $3200
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) = $3200 × 9% × 6
= $3200 ×9/100 × 6
= 3200 × 9 × 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 = $3200 + $1728
= $4928
Thus, Amount to be paid = $4928 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 = $3200
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 9% × 6)
= $3200 + ($3200 ×9/100 × 6)
= $3200 + (3200 × 9 × 6/100)
= $3200 + (28800 × 6/100)
= $3200 + (172800/100)
= $3200 + $1728 = $4928
Thus, Amount (A) to be paid = $4928 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 $3200, the simple interest in 1 year
= 9/100 × 3200
= 9 × 3200/100
= 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 = $3200 + $1728
= $4928
Thus, Amount to be paid = $4928 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.
(2) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(3) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(4) How much loan did Kevin borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8165 to clear it?
(5) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(6) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(7) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?
(8) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?