Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 8 years.
Correct Answer
$6496
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 2% × 8
= $5600 ×2/100 × 8
= 5600 × 2 × 8/100
= 11200 × 8/100
= 89600/100
= $896
Thus, Simple Interest = $896
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 = $5600 + $896
= $6496
Thus, Amount to be paid = $6496 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 = $5600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 2% × 8)
= $5600 + ($5600 ×2/100 × 8)
= $5600 + (5600 × 2 × 8/100)
= $5600 + (11200 × 8/100)
= $5600 + (89600/100)
= $5600 + $896 = $6496
Thus, Amount (A) to be paid = $6496 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 $5600, the simple interest in 1 year
= 2/100 × 5600
= 2 × 5600/100
= 11200/100 = $112
Thus, simple interest for 1 year = $112
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $112 × 8 = $896
Thus, Simple Interest (SI) = $896
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $896
= $6496
Thus, Amount to be paid = $6496 Answer
Similar Questions
(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.
(2) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(4) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(5) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?
(6) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
(8) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(9) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(10) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.