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) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(2) If Patricia borrowed $3150 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11403 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(5) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(6) If Daniel paid $4428 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(8) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 3% simple interest?
(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.