Question:
Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
Correct Answer
$6758
Solution And Explanation
Solution
Given,
Principal (P) = $5450
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) = $5450 × 3% × 8
= $5450 ×3/100 × 8
= 5450 × 3 × 8/100
= 16350 × 8/100
= 130800/100
= $1308
Thus, Simple Interest = $1308
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 = $5450 + $1308
= $6758
Thus, Amount to be paid = $6758 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 = $5450
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5450 + ($5450 × 3% × 8)
= $5450 + ($5450 ×3/100 × 8)
= $5450 + (5450 × 3 × 8/100)
= $5450 + (16350 × 8/100)
= $5450 + (130800/100)
= $5450 + $1308 = $6758
Thus, Amount (A) to be paid = $6758 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 $5450, the simple interest in 1 year
= 3/100 × 5450
= 3 × 5450/100
= 16350/100 = $163.5
Thus, simple interest for 1 year = $163.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $163.5 × 8 = $1308
Thus, Simple Interest (SI) = $1308
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5450 + $1308
= $6758
Thus, Amount to be paid = $6758 Answer
Similar Questions
(1) Michael had to pay $3597 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 5% simple interest?
(3) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(4) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 8 years.
(6) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9512 to clear the loan, then find the time period of the loan.
(7) If John paid $3584 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 10% simple interest?
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
(10) If Mark paid $5104 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.