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) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(2) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(4) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(6) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(7) How much loan did William borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6325 to clear it?
(8) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(10) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.