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) Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 3 years.
(2) If James paid $3480 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 10% simple interest?
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 7 years.
(5) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(6) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 5% simple interest?
(9) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.