Question:
What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 10% simple interest?
Correct Answer
$6400
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $4000 ×10/100 × 6
= 4000 × 10 × 6/100
= 40000 × 6/100
= 240000/100
= $2400
Thus, Simple Interest = $2400
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 + $2400
= $6400
Thus, Amount to be paid = $6400 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $4000 + ($4000 × 10% × 6)
= $4000 + ($4000 ×10/100 × 6)
= $4000 + (4000 × 10 × 6/100)
= $4000 + (40000 × 6/100)
= $4000 + (240000/100)
= $4000 + $2400 = $6400
Thus, Amount (A) to be paid = $6400 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $4000, the simple interest in 1 year
= 10/100 × 4000
= 10 × 4000/100
= 40000/100 = $400
Thus, simple interest for 1 year = $400
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $400 × 6 = $2400
Thus, Simple Interest (SI) = $2400
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $2400
= $6400
Thus, Amount to be paid = $6400 Answer
Similar Questions
(1) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(2) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
(3) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.
(4) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 4 years.
(6) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?
(7) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 8 years.
(8) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.
(10) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.