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) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(2) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 6% simple interest?
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(4) If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7152 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 7 years.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(8) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(9) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(10) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.