Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 8 years.
Correct Answer
$7440
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 3%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 8
= $6000 ×3/100 × 8
= 6000 × 3 × 8/100
= 18000 × 8/100
= 144000/100
= $1440
Thus, Simple Interest = $1440
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 + $1440
= $7440
Thus, Amount to be paid = $7440 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) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $6000 + ($6000 × 3% × 8)
= $6000 + ($6000 ×3/100 × 8)
= $6000 + (6000 × 3 × 8/100)
= $6000 + (18000 × 8/100)
= $6000 + (144000/100)
= $6000 + $1440 = $7440
Thus, Amount (A) to be paid = $7440 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $6000, the simple interest in 1 year
= 3/100 × 6000
= 3 × 6000/100
= 18000/100 = $180
Thus, simple interest for 1 year = $180
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $180 × 8 = $1440
Thus, Simple Interest (SI) = $1440
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $1440
= $7440
Thus, Amount to be paid = $7440 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(2) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 7 years.
(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(6) What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?
(7) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 7 years.
(8) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 3 years.
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.