Question:
Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.
Correct Answer
$6670
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 2% × 8
= $5750 ×2/100 × 8
= 5750 × 2 × 8/100
= 11500 × 8/100
= 92000/100
= $920
Thus, Simple Interest = $920
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 = $5750 + $920
= $6670
Thus, Amount to be paid = $6670 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 = $5750
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5750 + ($5750 × 2% × 8)
= $5750 + ($5750 ×2/100 × 8)
= $5750 + (5750 × 2 × 8/100)
= $5750 + (11500 × 8/100)
= $5750 + (92000/100)
= $5750 + $920 = $6670
Thus, Amount (A) to be paid = $6670 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 $5750, the simple interest in 1 year
= 2/100 × 5750
= 2 × 5750/100
= 11500/100 = $115
Thus, simple interest for 1 year = $115
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $115 × 8 = $920
Thus, Simple Interest (SI) = $920
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $920
= $6670
Thus, Amount to be paid = $6670 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(2) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 3 years.
(4) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?
(6) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 8 years.
(9) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(10) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.