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) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9231 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 8% simple interest?
(3) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(5) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 8 years.
(6) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?
(7) How much loan did Donna borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7535 to clear it?
(8) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5440 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.