Question:
What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 9% simple interest?
Correct Answer
$6160
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 9%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 6
= $4000 ×9/100 × 6
= 4000 × 9 × 6/100
= 36000 × 6/100
= 216000/100
= $2160
Thus, Simple Interest = $2160
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 + $2160
= $6160
Thus, Amount to be paid = $6160 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) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $4000 + ($4000 × 9% × 6)
= $4000 + ($4000 ×9/100 × 6)
= $4000 + (4000 × 9 × 6/100)
= $4000 + (36000 × 6/100)
= $4000 + (216000/100)
= $4000 + $2160 = $6160
Thus, Amount (A) to be paid = $6160 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $4000, the simple interest in 1 year
= 9/100 × 4000
= 9 × 4000/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $360 × 6 = $2160
Thus, Simple Interest (SI) = $2160
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $2160
= $6160
Thus, Amount to be paid = $6160 Answer
Similar Questions
(1) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 4% simple interest?
(2) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
(5) How much loan did Brian borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7920 to clear it?
(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.
(7) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 4% simple interest?
(9) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.