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 if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(3) How much loan did Sharon borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9687.5 to clear it?
(4) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.
(6) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
(7) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(8) If James paid $3240 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?