Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 3 years.
Correct Answer
$4720
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 6%
Time (t) = 3 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% × 3
= $4000 ×6/100 × 3
= 4000 × 6 × 3/100
= 24000 × 3/100
= 72000/100
= $720
Thus, Simple Interest = $720
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 + $720
= $4720
Thus, Amount to be paid = $4720 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) = 3 years
Thus, Amount (A)
= $4000 + ($4000 × 6% × 3)
= $4000 + ($4000 ×6/100 × 3)
= $4000 + (4000 × 6 × 3/100)
= $4000 + (24000 × 3/100)
= $4000 + (72000/100)
= $4000 + $720 = $4720
Thus, Amount (A) to be paid = $4720 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 3 years
= Simple interest for 1 year × 3
= $240 × 3 = $720
Thus, Simple Interest (SI) = $720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $720
= $4720
Thus, Amount to be paid = $4720 Answer
Similar Questions
(1) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 4% simple interest?
(2) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.
(3) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?
(4) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 5% simple interest.
(7) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(8) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.
(10) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?