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) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 4 years.
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 5% simple interest for 7 years.
(3) If Mary paid $3660 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(5) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.
(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?
(7) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 3 years.
(9) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(10) Michelle had to pay $5692.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.