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) If Susan borrowed $3650 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(3) How much loan did Sandra borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7417.5 to clear it?
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
(5) Calculate the amount due if John borrowed a sum of $3200 at 4% simple interest for 4 years.
(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?
(7) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 3 years.
(9) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?
(10) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.