Question:
Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 8 years.
Correct Answer
$6200
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 3%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $5000 × 3% × 8
= $5000 ×3/100 × 8
= 5000 × 3 × 8/100
= 15000 × 8/100
= 120000/100
= $1200
Thus, Simple Interest = $1200
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 = $5000 + $1200
= $6200
Thus, Amount to be paid = $6200 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 = $5000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5000 + ($5000 × 3% × 8)
= $5000 + ($5000 ×3/100 × 8)
= $5000 + (5000 × 3 × 8/100)
= $5000 + (15000 × 8/100)
= $5000 + (120000/100)
= $5000 + $1200 = $6200
Thus, Amount (A) to be paid = $6200 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5000, the simple interest in 1 year
= 3/100 × 5000
= 3 × 5000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $150 × 8 = $1200
Thus, Simple Interest (SI) = $1200
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $1200
= $6200
Thus, Amount to be paid = $6200 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
(2) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(3) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 7 years.
(5) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?
(6) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?