Question:
What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?
Correct Answer
$4480
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 6%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $4000 × 6% × 2
= $4000 ×6/100 × 2
= 4000 × 6 × 2/100
= 24000 × 2/100
= 48000/100
= $480
Thus, Simple Interest = $480
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 = $4000 + $480
= $4480
Thus, Amount to be paid = $4480 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 = $4000
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 2 years
Thus, Amount (A)
= $4000 + ($4000 × 6% × 2)
= $4000 + ($4000 ×6/100 × 2)
= $4000 + (4000 × 6 × 2/100)
= $4000 + (24000 × 2/100)
= $4000 + (48000/100)
= $4000 + $480 = $4480
Thus, Amount (A) to be paid = $4480 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $4000, the simple interest in 1 year
= 6/100 × 4000
= 6 × 4000/100
= 24000/100 = $240
Thus, simple interest for 1 year = $240
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $240 × 2 = $480
Thus, Simple Interest (SI) = $480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $480
= $4480
Thus, Amount to be paid = $4480 Answer
Similar Questions
(1) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 8 years.
(2) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?
(4) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 4 years.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 4 years.
(8) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(9) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 5% simple interest?