Question:
Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.
Correct Answer
$6572
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 3% × 8
= $5300 ×3/100 × 8
= 5300 × 3 × 8/100
= 15900 × 8/100
= 127200/100
= $1272
Thus, Simple Interest = $1272
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 = $5300 + $1272
= $6572
Thus, Amount to be paid = $6572 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 = $5300
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5300 + ($5300 × 3% × 8)
= $5300 + ($5300 ×3/100 × 8)
= $5300 + (5300 × 3 × 8/100)
= $5300 + (15900 × 8/100)
= $5300 + (127200/100)
= $5300 + $1272 = $6572
Thus, Amount (A) to be paid = $6572 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 $5300, the simple interest in 1 year
= 3/100 × 5300
= 3 × 5300/100
= 15900/100 = $159
Thus, simple interest for 1 year = $159
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $159 × 8 = $1272
Thus, Simple Interest (SI) = $1272
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1272
= $6572
Thus, Amount to be paid = $6572 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10332 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(4) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?
(5) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(6) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $6936 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 4 years.
(9) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 6% simple interest?
(10) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 9% simple interest?