Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.
Correct Answer
$8736
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 8% × 7
= $5600 ×8/100 × 7
= 5600 × 8 × 7/100
= 44800 × 7/100
= 313600/100
= $3136
Thus, Simple Interest = $3136
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 = $5600 + $3136
= $8736
Thus, Amount to be paid = $8736 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 = $5600
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 8% × 7)
= $5600 + ($5600 ×8/100 × 7)
= $5600 + (5600 × 8 × 7/100)
= $5600 + (44800 × 7/100)
= $5600 + (313600/100)
= $5600 + $3136 = $8736
Thus, Amount (A) to be paid = $8736 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 $5600, the simple interest in 1 year
= 8/100 × 5600
= 8 × 5600/100
= 44800/100 = $448
Thus, simple interest for 1 year = $448
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $448 × 7 = $3136
Thus, Simple Interest (SI) = $3136
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $3136
= $8736
Thus, Amount to be paid = $8736 Answer
Similar Questions
(1) Donna had to pay $5577.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(3) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11765 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(6) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 8% simple interest?
(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(8) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 8 years.