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) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.
(3) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 7% simple interest?
(4) Daniel had to pay $4592 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
(6) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(7) How much loan did Donna borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7535 to clear it?
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(10) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.