Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 8 years.
Correct Answer
$6902
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 2% × 8
= $5950 ×2/100 × 8
= 5950 × 2 × 8/100
= 11900 × 8/100
= 95200/100
= $952
Thus, Simple Interest = $952
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 = $5950 + $952
= $6902
Thus, Amount to be paid = $6902 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 = $5950
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5950 + ($5950 × 2% × 8)
= $5950 + ($5950 ×2/100 × 8)
= $5950 + (5950 × 2 × 8/100)
= $5950 + (11900 × 8/100)
= $5950 + (95200/100)
= $5950 + $952 = $6902
Thus, Amount (A) to be paid = $6902 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 $5950, the simple interest in 1 year
= 2/100 × 5950
= 2 × 5950/100
= 11900/100 = $119
Thus, simple interest for 1 year = $119
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $119 × 8 = $952
Thus, Simple Interest (SI) = $952
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $952
= $6902
Thus, Amount to be paid = $6902 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(3) If Mary paid $3416 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) 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.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?
(8) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
(9) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10212 to clear the loan, then find the time period of the loan.
(10) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.