Question:
Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
Correct Answer
$8580
Solution And Explanation
Solution
Given,
Principal (P) = $5500
Rate of Simple Interest (SI) = 8%
Time (t) = 7 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) = $5500 × 8% × 7
= $5500 ×8/100 × 7
= 5500 × 8 × 7/100
= 44000 × 7/100
= 308000/100
= $3080
Thus, Simple Interest = $3080
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 = $5500 + $3080
= $8580
Thus, Amount to be paid = $8580 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 = $5500
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5500 + ($5500 × 8% × 7)
= $5500 + ($5500 ×8/100 × 7)
= $5500 + (5500 × 8 × 7/100)
= $5500 + (44000 × 7/100)
= $5500 + (308000/100)
= $5500 + $3080 = $8580
Thus, Amount (A) to be paid = $8580 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 $5500, the simple interest in 1 year
= 8/100 × 5500
= 8 × 5500/100
= 44000/100 = $440
Thus, simple interest for 1 year = $440
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $440 × 7 = $3080
Thus, Simple Interest (SI) = $3080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $3080
= $8580
Thus, Amount to be paid = $8580 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(2) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
(4) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?
(5) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(6) How much loan did Joshua borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8625 to clear it?
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 7 years.
(8) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(9) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?