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) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 7 years.
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(5) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 4 years.
(7) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
(8) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?
(10) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.