Question:
What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?
Correct Answer
$4440
Solution And Explanation
Solution
Given,
Principal (P) = $3000
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $3000 × 8% × 6
= $3000 ×8/100 × 6
= 3000 × 8 × 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 = $3000 + $1440
= $4440
Thus, Amount to be paid = $4440 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 = $3000
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3000 + ($3000 × 8% × 6)
= $3000 + ($3000 ×8/100 × 6)
= $3000 + (3000 × 8 × 6/100)
= $3000 + (24000 × 6/100)
= $3000 + (144000/100)
= $3000 + $1440 = $4440
Thus, Amount (A) to be paid = $4440 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3000, the simple interest in 1 year
= 8/100 × 3000
= 8 × 3000/100
= 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 = $3000 + $1440
= $4440
Thus, Amount to be paid = $4440 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.
(2) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.
(4) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 8 years.
(6) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(7) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8344 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 4 years.
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 7 years.
(10) How much loan did Robert borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5865 to clear it?