Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 8 years.
Correct Answer
$6612
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 2% × 8
= $5700 ×2/100 × 8
= 5700 × 2 × 8/100
= 11400 × 8/100
= 91200/100
= $912
Thus, Simple Interest = $912
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 = $5700 + $912
= $6612
Thus, Amount to be paid = $6612 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 = $5700
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5700 + ($5700 × 2% × 8)
= $5700 + ($5700 ×2/100 × 8)
= $5700 + (5700 × 2 × 8/100)
= $5700 + (11400 × 8/100)
= $5700 + (91200/100)
= $5700 + $912 = $6612
Thus, Amount (A) to be paid = $6612 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 $5700, the simple interest in 1 year
= 2/100 × 5700
= 2 × 5700/100
= 11400/100 = $114
Thus, simple interest for 1 year = $114
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $114 × 8 = $912
Thus, Simple Interest (SI) = $912
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $912
= $6612
Thus, Amount to be paid = $6612 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 8 years.
(3) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 5% per annum?
(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(6) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 4 years.
(8) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 6% simple interest?
(9) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9060 to clear it?
(10) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.