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 Thomas paid $4408 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Lisa had to pay $4414.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(4) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(6) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.
(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 9% simple interest?
(9) If Richard borrowed $3600 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.