Question:
Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 8 years.
Correct Answer
$5974
Solution And Explanation
Solution
Given,
Principal (P) = $5150
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) = $5150 × 2% × 8
= $5150 ×2/100 × 8
= 5150 × 2 × 8/100
= 10300 × 8/100
= 82400/100
= $824
Thus, Simple Interest = $824
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 = $5150 + $824
= $5974
Thus, Amount to be paid = $5974 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 = $5150
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5150 + ($5150 × 2% × 8)
= $5150 + ($5150 ×2/100 × 8)
= $5150 + (5150 × 2 × 8/100)
= $5150 + (10300 × 8/100)
= $5150 + (82400/100)
= $5150 + $824 = $5974
Thus, Amount (A) to be paid = $5974 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 $5150, the simple interest in 1 year
= 2/100 × 5150
= 2 × 5150/100
= 10300/100 = $103
Thus, simple interest for 1 year = $103
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $103 × 8 = $824
Thus, Simple Interest (SI) = $824
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5150 + $824
= $5974
Thus, Amount to be paid = $5974 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(2) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 3 years.
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 7% simple interest?
(6) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
(7) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(9) How much loan did Michael borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6095 to clear it?
(10) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.