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) Christopher had to pay $4360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 7% simple interest.
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
(4) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(6) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(7) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(9) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.