Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.
Correct Answer
$6728
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 2% × 8
= $5800 ×2/100 × 8
= 5800 × 2 × 8/100
= 11600 × 8/100
= 92800/100
= $928
Thus, Simple Interest = $928
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 = $5800 + $928
= $6728
Thus, Amount to be paid = $6728 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 = $5800
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 2% × 8)
= $5800 + ($5800 ×2/100 × 8)
= $5800 + (5800 × 2 × 8/100)
= $5800 + (11600 × 8/100)
= $5800 + (92800/100)
= $5800 + $928 = $6728
Thus, Amount (A) to be paid = $6728 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 $5800, the simple interest in 1 year
= 2/100 × 5800
= 2 × 5800/100
= 11600/100 = $116
Thus, simple interest for 1 year = $116
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $116 × 8 = $928
Thus, Simple Interest (SI) = $928
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $928
= $6728
Thus, Amount to be paid = $6728 Answer
Similar Questions
(1) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 7% simple interest.
(2) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 3% simple interest?
(4) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(5) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7975 to clear it?
(6) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.
(8) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?
(9) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?
(10) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.