Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 7 years.
Correct Answer
$9048
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 8% × 7
= $5800 ×8/100 × 7
= 5800 × 8 × 7/100
= 46400 × 7/100
= 324800/100
= $3248
Thus, Simple Interest = $3248
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 = $5800 + $3248
= $9048
Thus, Amount to be paid = $9048 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 = $5800
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5800 + ($5800 × 8% × 7)
= $5800 + ($5800 ×8/100 × 7)
= $5800 + (5800 × 8 × 7/100)
= $5800 + (46400 × 7/100)
= $5800 + (324800/100)
= $5800 + $3248 = $9048
Thus, Amount (A) to be paid = $9048 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 $5800, the simple interest in 1 year
= 8/100 × 5800
= 8 × 5800/100
= 46400/100 = $464
Thus, simple interest for 1 year = $464
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $464 × 7 = $3248
Thus, Simple Interest (SI) = $3248
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $3248
= $9048
Thus, Amount to be paid = $9048 Answer
Similar Questions
(1) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(2) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(3) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?
(4) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?
(5) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(6) How much loan did Sandra borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7417.5 to clear it?
(7) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(8) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(9) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 8 years.