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) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.
(2) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 5% simple interest for 7 years.
(4) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 7 years.
(6) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(8) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(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 Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.