Question:
Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
Correct Answer
$10200
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 7%
Time (t) = 10 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% × 10
= $6000 ×7/100 × 10
= 6000 × 7 × 10/100
= 42000 × 10/100
= 420000/100
= $4200
Thus, Simple Interest = $4200
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 + $4200
= $10200
Thus, Amount to be paid = $10200 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) = 10 years
Thus, Amount (A)
= $6000 + ($6000 × 7% × 10)
= $6000 + ($6000 ×7/100 × 10)
= $6000 + (6000 × 7 × 10/100)
= $6000 + (42000 × 10/100)
= $6000 + (420000/100)
= $6000 + $4200 = $10200
Thus, Amount (A) to be paid = $10200 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 10 years
= Simple interest for 1 year × 10
= $420 × 10 = $4200
Thus, Simple Interest (SI) = $4200
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $4200
= $10200
Thus, Amount to be paid = $10200 Answer
Similar Questions
(1) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?
(2) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(3) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
(5) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(6) If Daniel paid $4592 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 8% simple interest?
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?
(9) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7600 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 4 years.