Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.
Correct Answer
$6206
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 2% × 8
= $5350 ×2/100 × 8
= 5350 × 2 × 8/100
= 10700 × 8/100
= 85600/100
= $856
Thus, Simple Interest = $856
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 = $5350 + $856
= $6206
Thus, Amount to be paid = $6206 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 = $5350
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5350 + ($5350 × 2% × 8)
= $5350 + ($5350 ×2/100 × 8)
= $5350 + (5350 × 2 × 8/100)
= $5350 + (10700 × 8/100)
= $5350 + (85600/100)
= $5350 + $856 = $6206
Thus, Amount (A) to be paid = $6206 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 $5350, the simple interest in 1 year
= 2/100 × 5350
= 2 × 5350/100
= 10700/100 = $107
Thus, simple interest for 1 year = $107
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $107 × 8 = $856
Thus, Simple Interest (SI) = $856
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $856
= $6206
Thus, Amount to be paid = $6206 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(3) Thomas had to pay $4028 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(5) How much loan did Joseph borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7125 to clear it?
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 4 years.
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 8 years.
(8) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(9) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8507 to clear the loan, then find the time period of the loan.