Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.
Correct Answer
$6438
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 2% × 8
= $5550 ×2/100 × 8
= 5550 × 2 × 8/100
= 11100 × 8/100
= 88800/100
= $888
Thus, Simple Interest = $888
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 = $5550 + $888
= $6438
Thus, Amount to be paid = $6438 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 = $5550
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5550 + ($5550 × 2% × 8)
= $5550 + ($5550 ×2/100 × 8)
= $5550 + (5550 × 2 × 8/100)
= $5550 + (11100 × 8/100)
= $5550 + (88800/100)
= $5550 + $888 = $6438
Thus, Amount (A) to be paid = $6438 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 $5550, the simple interest in 1 year
= 2/100 × 5550
= 2 × 5550/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $111 × 8 = $888
Thus, Simple Interest (SI) = $888
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $888
= $6438
Thus, Amount to be paid = $6438 Answer
Similar Questions
(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.
(2) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11946 to clear the loan, then find the time period of the loan.
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(4) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(5) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.
(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 8 years.
(8) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(9) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?
(10) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.