Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
Correct Answer
$7920
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 4%
Time (t) = 8 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% × 8
= $6000 ×4/100 × 8
= 6000 × 4 × 8/100
= 24000 × 8/100
= 192000/100
= $1920
Thus, Simple Interest = $1920
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 + $1920
= $7920
Thus, Amount to be paid = $7920 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) = 8 years
Thus, Amount (A)
= $6000 + ($6000 × 4% × 8)
= $6000 + ($6000 ×4/100 × 8)
= $6000 + (6000 × 4 × 8/100)
= $6000 + (24000 × 8/100)
= $6000 + (192000/100)
= $6000 + $1920 = $7920
Thus, Amount (A) to be paid = $7920 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 8 years
= Simple interest for 1 year × 8
= $240 × 8 = $1920
Thus, Simple Interest (SI) = $1920
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $1920
= $7920
Thus, Amount to be paid = $7920 Answer
Similar Questions
(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 5% simple interest?
(2) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(3) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(5) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 7% simple interest.
(9) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.