Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 8 years.
Correct Answer
$9360
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 7%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 8
= $6000 ×7/100 × 8
= 6000 × 7 × 8/100
= 42000 × 8/100
= 336000/100
= $3360
Thus, Simple Interest = $3360
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 + $3360
= $9360
Thus, Amount to be paid = $9360 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) = 7%
And, Time (t) = 8 years
Thus, Amount (A)
= $6000 + ($6000 × 7% × 8)
= $6000 + ($6000 ×7/100 × 8)
= $6000 + (6000 × 7 × 8/100)
= $6000 + (42000 × 8/100)
= $6000 + (336000/100)
= $6000 + $3360 = $9360
Thus, Amount (A) to be paid = $9360 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $6000, the simple interest in 1 year
= 7/100 × 6000
= 7 × 6000/100
= 42000/100 = $420
Thus, simple interest for 1 year = $420
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $420 × 8 = $3360
Thus, Simple Interest (SI) = $3360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $3360
= $9360
Thus, Amount to be paid = $9360 Answer
Similar Questions
(1) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6267.5 to clear it?
(2) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(3) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.
(4) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(5) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(6) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(8) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
(10) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 4% simple interest?