Question:
Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
Correct Answer
$10800
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (SI) = 8%
Time (t) = 10 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% × 10
= $6000 ×8/100 × 10
= 6000 × 8 × 10/100
= 48000 × 10/100
= 480000/100
= $4800
Thus, Simple Interest = $4800
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 + $4800
= $10800
Thus, Amount to be paid = $10800 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) = 10 years
Thus, Amount (A)
= $6000 + ($6000 × 8% × 10)
= $6000 + ($6000 ×8/100 × 10)
= $6000 + (6000 × 8 × 10/100)
= $6000 + (48000 × 10/100)
= $6000 + (480000/100)
= $6000 + $4800 = $10800
Thus, Amount (A) to be paid = $10800 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 10 years
= Simple interest for 1 year × 10
= $480 × 10 = $4800
Thus, Simple Interest (SI) = $4800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $6000 + $4800
= $10800
Thus, Amount to be paid = $10800 Answer
Similar Questions
(1) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.
(4) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(5) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 4% simple interest?
(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?
(8) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.
(10) Christopher had to pay $4480 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.