Question:
Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 7 years.
Correct Answer
$9126
Solution And Explanation
Solution
Given,
Principal (P) = $5850
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) = $5850 × 8% × 7
= $5850 ×8/100 × 7
= 5850 × 8 × 7/100
= 46800 × 7/100
= 327600/100
= $3276
Thus, Simple Interest = $3276
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 = $5850 + $3276
= $9126
Thus, Amount to be paid = $9126 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 = $5850
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5850 + ($5850 × 8% × 7)
= $5850 + ($5850 ×8/100 × 7)
= $5850 + (5850 × 8 × 7/100)
= $5850 + (46800 × 7/100)
= $5850 + (327600/100)
= $5850 + $3276 = $9126
Thus, Amount (A) to be paid = $9126 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 $5850, the simple interest in 1 year
= 8/100 × 5850
= 8 × 5850/100
= 46800/100 = $468
Thus, simple interest for 1 year = $468
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $468 × 7 = $3276
Thus, Simple Interest (SI) = $3276
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5850 + $3276
= $9126
Thus, Amount to be paid = $9126 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(3) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?
(4) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
(6) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?
(7) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 8 years.
(8) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(10) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?