Question:
Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.
Correct Answer
$6264
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 2% × 8
= $5400 ×2/100 × 8
= 5400 × 2 × 8/100
= 10800 × 8/100
= 86400/100
= $864
Thus, Simple Interest = $864
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 = $5400 + $864
= $6264
Thus, Amount to be paid = $6264 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 = $5400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5400 + ($5400 × 2% × 8)
= $5400 + ($5400 ×2/100 × 8)
= $5400 + (5400 × 2 × 8/100)
= $5400 + (10800 × 8/100)
= $5400 + (86400/100)
= $5400 + $864 = $6264
Thus, Amount (A) to be paid = $6264 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 $5400, the simple interest in 1 year
= 2/100 × 5400
= 2 × 5400/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $108 × 8 = $864
Thus, Simple Interest (SI) = $864
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $864
= $6264
Thus, Amount to be paid = $6264 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
(2) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 7 years.
(3) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(4) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) How much loan did Jacob borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $10000 to clear it?
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(7) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 7 years.
(9) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?