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) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(2) Lisa had to pay $4536 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 8 years.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10132 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 8 years.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.
(8) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(9) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(10) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.