Question:
What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 3% simple interest?
Correct Answer
$4720
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 6
= $4000 ×3/100 × 6
= 4000 × 3 × 6/100
= 12000 × 6/100
= 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) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $4000 + ($4000 × 3% × 6)
= $4000 + ($4000 ×3/100 × 6)
= $4000 + (4000 × 3 × 6/100)
= $4000 + (12000 × 6/100)
= $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 = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $4000, the simple interest in 1 year
= 3/100 × 4000
= 3 × 4000/100
= 12000/100 = $120
Thus, simple interest for 1 year = $120
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $120 × 6 = $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) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(3) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(5) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 8 years.
(7) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 2% simple interest?
(8) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?