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) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 7 years.
(2) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?
(3) Jessica had to pay $4312.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.
(5) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 8% simple interest?
(6) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(8) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?
(9) How much loan did Joseph borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6270 to clear it?
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.