Question:
What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?
Correct Answer
$5120
Solution And Explanation
Solution
Given,
Principal (P) = $3200
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $3200 ×10/100 × 6
= 3200 × 10 × 6/100
= 32000 × 6/100
= 192000/100
= $1920
Thus, Simple Interest = $1920
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 + $1920
= $5120
Thus, Amount to be paid = $5120 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3200 + ($3200 × 10% × 6)
= $3200 + ($3200 ×10/100 × 6)
= $3200 + (3200 × 10 × 6/100)
= $3200 + (32000 × 6/100)
= $3200 + (192000/100)
= $3200 + $1920 = $5120
Thus, Amount (A) to be paid = $5120 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3200, the simple interest in 1 year
= 10/100 × 3200
= 10 × 3200/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $320 × 6 = $1920
Thus, Simple Interest (SI) = $1920
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3200 + $1920
= $5120
Thus, Amount to be paid = $5120 Answer
Similar Questions
(1) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 8 years.
(4) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 8% simple interest.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 4 years.
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(7) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(9) How much loan did Melissa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8452.5 to clear it?
(10) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?