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) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(2) If Emily paid $5320 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
(4) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 4% simple interest?
(6) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.
(7) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 3% simple interest?
(9) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 8 years.
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.