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) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(2) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(5) Richard had to pay $4032 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
(7) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(8) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(9) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(10) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.