Question:
What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
Correct Answer
$5920
Solution And Explanation
Solution
Given,
Principal (P) = $4000
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) = $4000 × 8% × 6
= $4000 ×8/100 × 6
= 4000 × 8 × 6/100
= 32000 × 6/100
= 192000/100
= $1920
Thus, Simple Interest = $1920
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 + $1920
= $5920
Thus, Amount to be paid = $5920 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) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $4000 + ($4000 × 8% × 6)
= $4000 + ($4000 ×8/100 × 6)
= $4000 + (4000 × 8 × 6/100)
= $4000 + (32000 × 6/100)
= $4000 + (192000/100)
= $4000 + $1920 = $5920
Thus, Amount (A) to be paid = $5920 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 $4000, the simple interest in 1 year
= 8/100 × 4000
= 8 × 4000/100
= 32000/100 = $320
Thus, simple interest for 1 year = $320
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $320 × 6 = $1920
Thus, Simple Interest (SI) = $1920
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $1920
= $5920
Thus, Amount to be paid = $5920 Answer
Similar Questions
(1) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?
(3) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 3 years.
(5) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 5% simple interest?
(7) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 8 years.
(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 8% simple interest?
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8437.5 to clear it?