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) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.
(2) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 9% simple interest?
(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(7) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
(9) Lisa had to pay $4293 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Calculate the amount due if David borrowed a sum of $3400 at 10% simple interest for 4 years.