Question:
Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.
Correct Answer
$6148
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 2% × 8
= $5300 ×2/100 × 8
= 5300 × 2 × 8/100
= 10600 × 8/100
= 84800/100
= $848
Thus, Simple Interest = $848
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 = $5300 + $848
= $6148
Thus, Amount to be paid = $6148 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 = $5300
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5300 + ($5300 × 2% × 8)
= $5300 + ($5300 ×2/100 × 8)
= $5300 + (5300 × 2 × 8/100)
= $5300 + (10600 × 8/100)
= $5300 + (84800/100)
= $5300 + $848 = $6148
Thus, Amount (A) to be paid = $6148 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 $5300, the simple interest in 1 year
= 2/100 × 5300
= 2 × 5300/100
= 10600/100 = $106
Thus, simple interest for 1 year = $106
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $106 × 8 = $848
Thus, Simple Interest (SI) = $848
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $848
= $6148
Thus, Amount to be paid = $6148 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5440 to clear the loan, then find the time period of the loan.
(2) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(4) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(5) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(6) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.
(8) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 3% simple interest?
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
(10) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?