Question:
Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
Correct Answer
$5916
Solution And Explanation
Solution
Given,
Principal (P) = $5100
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) = $5100 × 2% × 8
= $5100 ×2/100 × 8
= 5100 × 2 × 8/100
= 10200 × 8/100
= 81600/100
= $816
Thus, Simple Interest = $816
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 = $5100 + $816
= $5916
Thus, Amount to be paid = $5916 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 = $5100
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5100 + ($5100 × 2% × 8)
= $5100 + ($5100 ×2/100 × 8)
= $5100 + (5100 × 2 × 8/100)
= $5100 + (10200 × 8/100)
= $5100 + (81600/100)
= $5100 + $816 = $5916
Thus, Amount (A) to be paid = $5916 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 $5100, the simple interest in 1 year
= 2/100 × 5100
= 2 × 5100/100
= 10200/100 = $102
Thus, simple interest for 1 year = $102
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $102 × 8 = $816
Thus, Simple Interest (SI) = $816
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5100 + $816
= $5916
Thus, Amount to be paid = $5916 Answer
Similar Questions
(1) Jessica had to pay $3975 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 6% simple interest?
(3) In how much time a principal of $3000 will amount to $3360 at a simple interest of 4% per annum?
(4) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(5) How much loan did Jacob borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9600 to clear it?
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 4 years.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(10) If Nancy paid $4648 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.