Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
Correct Answer
$6840
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 2%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $6000 × 2% × 7
= $6000 ×2/100 × 7
= 6000 × 2 × 7/100
= 12000 × 7/100
= 84000/100
= $840
Thus, Simple Interest = $840
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 = $6000 + $840
= $6840
Thus, Amount to be paid = $6840 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 = $6000
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $6000 + ($6000 × 2% × 7)
= $6000 + ($6000 ×2/100 × 7)
= $6000 + (6000 × 2 × 7/100)
= $6000 + (12000 × 7/100)
= $6000 + (84000/100)
= $6000 + $840 = $6840
Thus, Amount (A) to be paid = $6840 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $6000, the simple interest in 1 year
= 2/100 × 6000
= 2 × 6000/100
= 12000/100 = $120
Thus, simple interest for 1 year = $120
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $120 × 7 = $840
Thus, Simple Interest (SI) = $840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $840
= $6840
Thus, Amount to be paid = $6840 Answer
Similar Questions
(1) If Anthony paid $4816 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 7 years.
(5) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(8) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(9) Barbara had to pay $3976 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 4 years.