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) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?
(2) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 3 years.
(3) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(4) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(5) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(6) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(8) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 7% simple interest?
(10) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.