Question:
Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
Correct Answer
$9840
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 8%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 8
= $6000 ×8/100 × 8
= 6000 × 8 × 8/100
= 48000 × 8/100
= 384000/100
= $3840
Thus, Simple Interest = $3840
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 + $3840
= $9840
Thus, Amount to be paid = $9840 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) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $6000 + ($6000 × 8% × 8)
= $6000 + ($6000 ×8/100 × 8)
= $6000 + (6000 × 8 × 8/100)
= $6000 + (48000 × 8/100)
= $6000 + (384000/100)
= $6000 + $3840 = $9840
Thus, Amount (A) to be paid = $9840 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $6000, the simple interest in 1 year
= 8/100 × 6000
= 8 × 6000/100
= 48000/100 = $480
Thus, simple interest for 1 year = $480
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $480 × 8 = $3840
Thus, Simple Interest (SI) = $3840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $3840
= $9840
Thus, Amount to be paid = $9840 Answer
Similar Questions
(1) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(3) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(5) How much loan did Nancy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7072.5 to clear it?
(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(9) How much loan did Ronald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9375 to clear it?
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 2% simple interest?