Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 8 years.
Correct Answer
$8880
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 6%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 8
= $6000 ×6/100 × 8
= 6000 × 6 × 8/100
= 36000 × 8/100
= 288000/100
= $2880
Thus, Simple Interest = $2880
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 + $2880
= $8880
Thus, Amount to be paid = $8880 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) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $6000 + ($6000 × 6% × 8)
= $6000 + ($6000 ×6/100 × 8)
= $6000 + (6000 × 6 × 8/100)
= $6000 + (36000 × 8/100)
= $6000 + (288000/100)
= $6000 + $2880 = $8880
Thus, Amount (A) to be paid = $8880 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $6000, the simple interest in 1 year
= 6/100 × 6000
= 6 × 6000/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $360 × 8 = $2880
Thus, Simple Interest (SI) = $2880
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $2880
= $8880
Thus, Amount to be paid = $8880 Answer
Similar Questions
(1) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $5984 to clear the loan, then find the time period of the loan.
(2) How much loan did Edward borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9120 to clear it?
(3) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 10% simple interest?
(6) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(7) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) If Christopher paid $4480 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) How much loan did Joshua borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7935 to clear it?
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.