Question:
Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.
Correct Answer
$6380
Solution And Explanation
Solution
Given,
Principal (P) = $5500
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) = $5500 × 2% × 8
= $5500 ×2/100 × 8
= 5500 × 2 × 8/100
= 11000 × 8/100
= 88000/100
= $880
Thus, Simple Interest = $880
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 = $5500 + $880
= $6380
Thus, Amount to be paid = $6380 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 = $5500
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5500 + ($5500 × 2% × 8)
= $5500 + ($5500 ×2/100 × 8)
= $5500 + (5500 × 2 × 8/100)
= $5500 + (11000 × 8/100)
= $5500 + (88000/100)
= $5500 + $880 = $6380
Thus, Amount (A) to be paid = $6380 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 $5500, the simple interest in 1 year
= 2/100 × 5500
= 2 × 5500/100
= 11000/100 = $110
Thus, simple interest for 1 year = $110
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $110 × 8 = $880
Thus, Simple Interest (SI) = $880
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $880
= $6380
Thus, Amount to be paid = $6380 Answer
Similar Questions
(1) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
(2) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(3) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(5) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 7 years.
(7) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 4% simple interest?
(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(10) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.