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) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(2) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9184 to clear the loan, then find the time period of the loan.
(3) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 8 years.
(6) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(7) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(9) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7708 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.