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) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8344 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 4% simple interest.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.
(4) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 4% simple interest?
(5) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.
(7) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(8) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 8 years.
(9) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?
(10) Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 3 years.