Question:
Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.
Correct Answer
$5800
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 2%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $5000 × 2% × 8
= $5000 ×2/100 × 8
= 5000 × 2 × 8/100
= 10000 × 8/100
= 80000/100
= $800
Thus, Simple Interest = $800
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 = $5000 + $800
= $5800
Thus, Amount to be paid = $5800 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 = $5000
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5000 + ($5000 × 2% × 8)
= $5000 + ($5000 ×2/100 × 8)
= $5000 + (5000 × 2 × 8/100)
= $5000 + (10000 × 8/100)
= $5000 + (80000/100)
= $5000 + $800 = $5800
Thus, Amount (A) to be paid = $5800 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5000, the simple interest in 1 year
= 2/100 × 5000
= 2 × 5000/100
= 10000/100 = $100
Thus, simple interest for 1 year = $100
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $100 × 8 = $800
Thus, Simple Interest (SI) = $800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $800
= $5800
Thus, Amount to be paid = $5800 Answer
Similar Questions
(1) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 4 years.
(2) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 10% simple interest.
(3) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(4) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(6) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.
(9) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
(10) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?