Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 3 years.
Correct Answer
$4960
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 8%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 3
= $4000 ×8/100 × 3
= 4000 × 8 × 3/100
= 32000 × 3/100
= 96000/100
= $960
Thus, Simple Interest = $960
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 + $960
= $4960
Thus, Amount to be paid = $4960 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $4000 + ($4000 × 8% × 3)
= $4000 + ($4000 ×8/100 × 3)
= $4000 + (4000 × 8 × 3/100)
= $4000 + (32000 × 3/100)
= $4000 + (96000/100)
= $4000 + $960 = $4960
Thus, Amount (A) to be paid = $4960 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $4000, the simple interest in 1 year
= 8/100 × 4000
= 8 × 4000/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $320 × 3 = $960
Thus, Simple Interest (SI) = $960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $960
= $4960
Thus, Amount to be paid = $4960 Answer
Similar Questions
(1) Emily had to pay $5320 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.
(3) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 6% simple interest.
(5) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 6% simple interest.
(6) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(8) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 7 years.
(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 6% simple interest?