Question:
Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 8 years.
Correct Answer
$5858
Solution And Explanation
Solution
Given,
Principal (P) = $5050
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) = $5050 × 2% × 8
= $5050 ×2/100 × 8
= 5050 × 2 × 8/100
= 10100 × 8/100
= 80800/100
= $808
Thus, Simple Interest = $808
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 = $5050 + $808
= $5858
Thus, Amount to be paid = $5858 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 = $5050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5050 + ($5050 × 2% × 8)
= $5050 + ($5050 ×2/100 × 8)
= $5050 + (5050 × 2 × 8/100)
= $5050 + (10100 × 8/100)
= $5050 + (80800/100)
= $5050 + $808 = $5858
Thus, Amount (A) to be paid = $5858 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 $5050, the simple interest in 1 year
= 2/100 × 5050
= 2 × 5050/100
= 10100/100 = $101
Thus, simple interest for 1 year = $101
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $101 × 8 = $808
Thus, Simple Interest (SI) = $808
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $808
= $5858
Thus, Amount to be paid = $5858 Answer
Similar Questions
(1) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.
(2) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(3) How much loan did Andrew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8160 to clear it?
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 7 years.
(5) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(6) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11316 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(9) If Lisa paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?