Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
Correct Answer
$6844
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 2% × 8
= $5900 ×2/100 × 8
= 5900 × 2 × 8/100
= 11800 × 8/100
= 94400/100
= $944
Thus, Simple Interest = $944
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 = $5900 + $944
= $6844
Thus, Amount to be paid = $6844 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 = $5900
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5900 + ($5900 × 2% × 8)
= $5900 + ($5900 ×2/100 × 8)
= $5900 + (5900 × 2 × 8/100)
= $5900 + (11800 × 8/100)
= $5900 + (94400/100)
= $5900 + $944 = $6844
Thus, Amount (A) to be paid = $6844 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 $5900, the simple interest in 1 year
= 2/100 × 5900
= 2 × 5900/100
= 11800/100 = $118
Thus, simple interest for 1 year = $118
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $118 × 8 = $944
Thus, Simple Interest (SI) = $944
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $944
= $6844
Thus, Amount to be paid = $6844 Answer
Similar Questions
(1) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.
(3) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(4) How much loan did Kevin borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8520 to clear it?
(5) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(7) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
(10) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?