Question:
What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?
Correct Answer
$5440
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 6%
Time (t) = 6 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% × 6
= $4000 ×6/100 × 6
= 4000 × 6 × 6/100
= 24000 × 6/100
= 144000/100
= $1440
Thus, Simple Interest = $1440
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 + $1440
= $5440
Thus, Amount to be paid = $5440 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) = 6 years
Thus, Amount (A)
= $4000 + ($4000 × 6% × 6)
= $4000 + ($4000 ×6/100 × 6)
= $4000 + (4000 × 6 × 6/100)
= $4000 + (24000 × 6/100)
= $4000 + (144000/100)
= $4000 + $1440 = $5440
Thus, Amount (A) to be paid = $5440 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 6 years
= Simple interest for 1 year × 6
= $240 × 6 = $1440
Thus, Simple Interest (SI) = $1440
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $1440
= $5440
Thus, Amount to be paid = $5440 Answer
Similar Questions
(1) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 4 years.
(3) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 6% simple interest?
(4) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 3 years.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
(7) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 5% simple interest?
(8) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(10) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.