Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
Correct Answer
$6960
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 2%
Time (t) = 8 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% × 8
= $6000 ×2/100 × 8
= 6000 × 2 × 8/100
= 12000 × 8/100
= 96000/100
= $960
Thus, Simple Interest = $960
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 + $960
= $6960
Thus, Amount to be paid = $6960 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) = 8 years
Thus, Amount (A)
= $6000 + ($6000 × 2% × 8)
= $6000 + ($6000 ×2/100 × 8)
= $6000 + (6000 × 2 × 8/100)
= $6000 + (12000 × 8/100)
= $6000 + (96000/100)
= $6000 + $960 = $6960
Thus, Amount (A) to be paid = $6960 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 8 years
= Simple interest for 1 year × 8
= $120 × 8 = $960
Thus, Simple Interest (SI) = $960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $960
= $6960
Thus, Amount to be paid = $6960 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 6% simple interest?
(3) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(4) Susan had to pay $3869 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?
(6) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(7) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(8) How much loan did Betty borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7187.5 to clear it?
(9) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.