Question:
Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
Correct Answer
$6554
Solution And Explanation
Solution
Given,
Principal (P) = $5650
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) = $5650 × 2% × 8
= $5650 ×2/100 × 8
= 5650 × 2 × 8/100
= 11300 × 8/100
= 90400/100
= $904
Thus, Simple Interest = $904
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 = $5650 + $904
= $6554
Thus, Amount to be paid = $6554 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 = $5650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5650 + ($5650 × 2% × 8)
= $5650 + ($5650 ×2/100 × 8)
= $5650 + (5650 × 2 × 8/100)
= $5650 + (11300 × 8/100)
= $5650 + (90400/100)
= $5650 + $904 = $6554
Thus, Amount (A) to be paid = $6554 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 $5650, the simple interest in 1 year
= 2/100 × 5650
= 2 × 5650/100
= 11300/100 = $113
Thus, simple interest for 1 year = $113
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $113 × 8 = $904
Thus, Simple Interest (SI) = $904
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5650 + $904
= $6554
Thus, Amount to be paid = $6554 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(2) How much loan did Robert borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5865 to clear it?
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 6% simple interest?
(4) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7980 to clear it?
(5) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(6) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(7) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 3% simple interest?
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(9) In how much time a principal of $3050 will amount to $3324.5 at a simple interest of 3% per annum?
(10) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.