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) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.
(2) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 5% per annum?
(3) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 2% simple interest?
(5) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 7 years.
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(8) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(9) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.