Question:
Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
Correct Answer
$6032
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 2% × 8
= $5200 ×2/100 × 8
= 5200 × 2 × 8/100
= 10400 × 8/100
= 83200/100
= $832
Thus, Simple Interest = $832
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 = $5200 + $832
= $6032
Thus, Amount to be paid = $6032 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 = $5200
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5200 + ($5200 × 2% × 8)
= $5200 + ($5200 ×2/100 × 8)
= $5200 + (5200 × 2 × 8/100)
= $5200 + (10400 × 8/100)
= $5200 + (83200/100)
= $5200 + $832 = $6032
Thus, Amount (A) to be paid = $6032 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 $5200, the simple interest in 1 year
= 2/100 × 5200
= 2 × 5200/100
= 10400/100 = $104
Thus, simple interest for 1 year = $104
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $104 × 8 = $832
Thus, Simple Interest (SI) = $832
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $832
= $6032
Thus, Amount to be paid = $6032 Answer
Similar Questions
(1) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(2) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?
(3) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?
(4) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 8 years.
(7) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(8) What amount does William have to pay after 6 years if he takes a loan of $3500 at 2% simple interest?
(9) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?