Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 4 years.
Correct Answer
$4960
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 6%
Time (t) = 4 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% × 4
= $4000 ×6/100 × 4
= 4000 × 6 × 4/100
= 24000 × 4/100
= 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $4000 + ($4000 × 6% × 4)
= $4000 + ($4000 ×6/100 × 4)
= $4000 + (4000 × 6 × 4/100)
= $4000 + (24000 × 4/100)
= $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 = 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 4 years
= Simple interest for 1 year × 4
= $240 × 4 = $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) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(7) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.
(8) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.
(9) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 3% simple interest?
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.