Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.
Correct Answer
$8658
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 8% × 7
= $5550 ×8/100 × 7
= 5550 × 8 × 7/100
= 44400 × 7/100
= 310800/100
= $3108
Thus, Simple Interest = $3108
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 = $5550 + $3108
= $8658
Thus, Amount to be paid = $8658 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 = $5550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5550 + ($5550 × 8% × 7)
= $5550 + ($5550 ×8/100 × 7)
= $5550 + (5550 × 8 × 7/100)
= $5550 + (44400 × 7/100)
= $5550 + (310800/100)
= $5550 + $3108 = $8658
Thus, Amount (A) to be paid = $8658 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 $5550, the simple interest in 1 year
= 8/100 × 5550
= 8 × 5550/100
= 44400/100 = $444
Thus, simple interest for 1 year = $444
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $444 × 7 = $3108
Thus, Simple Interest (SI) = $3108
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3108
= $8658
Thus, Amount to be paid = $8658 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
(2) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 8 years.
(5) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6512 to clear the loan, then find the time period of the loan.
(6) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10136 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 3 years.
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 4 years.
(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 10% simple interest?
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.