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) If Susan paid $4088 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Charles had to pay $4368 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 8% simple interest?
(4) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(5) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 7 years.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 7 years.
(8) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?
(9) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.