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) Find the amount to be paid if John borrowed a sum of $5200 at 3% simple interest for 7 years.
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.
(4) Elizabeth had to pay $3760.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 8 years.
(6) If Emily paid $5510 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.
(8) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 3% simple interest?
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 7 years.