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) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 9% simple interest?
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(5) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.
(6) In how much time a principal of $3200 will amount to $3520 at a simple interest of 2% per annum?
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 4% simple interest for 8 years.
(8) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(9) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(10) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.