Question:
Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
Correct Answer
$8400
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 4%
Time (t) = 10 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% × 10
= $6000 ×4/100 × 10
= 6000 × 4 × 10/100
= 24000 × 10/100
= 240000/100
= $2400
Thus, Simple Interest = $2400
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 + $2400
= $8400
Thus, Amount to be paid = $8400 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) = 10 years
Thus, Amount (A)
= $6000 + ($6000 × 4% × 10)
= $6000 + ($6000 ×4/100 × 10)
= $6000 + (6000 × 4 × 10/100)
= $6000 + (24000 × 10/100)
= $6000 + (240000/100)
= $6000 + $2400 = $8400
Thus, Amount (A) to be paid = $8400 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 10 years
= Simple interest for 1 year × 10
= $240 × 10 = $2400
Thus, Simple Interest (SI) = $2400
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $2400
= $8400
Thus, Amount to be paid = $8400 Answer
Similar Questions
(1) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?
(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 5% simple interest?
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(6) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?
(8) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(9) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.