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) If William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 3 years.
(3) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(5) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 3 years.
(7) If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(9) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
(10) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.