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) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 7 years.
(3) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.
(4) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 9% simple interest?
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 3 years.
(6) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(8) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(10) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?