Question:
Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
Correct Answer
$7200
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 2%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 10
= $6000 ×2/100 × 10
= 6000 × 2 × 10/100
= 12000 × 10/100
= 120000/100
= $1200
Thus, Simple Interest = $1200
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 + $1200
= $7200
Thus, Amount to be paid = $7200 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) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $6000 + ($6000 × 2% × 10)
= $6000 + ($6000 ×2/100 × 10)
= $6000 + (6000 × 2 × 10/100)
= $6000 + (12000 × 10/100)
= $6000 + (120000/100)
= $6000 + $1200 = $7200
Thus, Amount (A) to be paid = $7200 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $6000, the simple interest in 1 year
= 2/100 × 6000
= 2 × 6000/100
= 12000/100 = $120
Thus, simple interest for 1 year = $120
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $120 × 10 = $1200
Thus, Simple Interest (SI) = $1200
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $1200
= $7200
Thus, Amount to be paid = $7200 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.
(4) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 8% simple interest?
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 4 years.
(9) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7216 to clear the loan, then find the time period of the loan.
(10) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.