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) How much loan did Thomas borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6670 to clear it?
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.
(4) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 9% simple interest?
(5) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.
(6) What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.
(9) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 7 years.