Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.
Correct Answer
$7680
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 4%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 7
= $6000 ×4/100 × 7
= 6000 × 4 × 7/100
= 24000 × 7/100
= 168000/100
= $1680
Thus, Simple Interest = $1680
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 + $1680
= $7680
Thus, Amount to be paid = $7680 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) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $6000 + ($6000 × 4% × 7)
= $6000 + ($6000 ×4/100 × 7)
= $6000 + (6000 × 4 × 7/100)
= $6000 + (24000 × 7/100)
= $6000 + (168000/100)
= $6000 + $1680 = $7680
Thus, Amount (A) to be paid = $7680 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $6000, the simple interest in 1 year
= 4/100 × 6000
= 4 × 6000/100
= 24000/100 = $240
Thus, simple interest for 1 year = $240
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $240 × 7 = $1680
Thus, Simple Interest (SI) = $1680
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $1680
= $7680
Thus, Amount to be paid = $7680 Answer
Similar Questions
(1) If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 5% simple interest?
(6) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8320 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(8) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?