Question:
( 1 of 10 ) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 8 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$5550
Correct Answer
$6882
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 3% × 8
= $5550 ×3/100 × 8
= 5550 × 3 × 8/100
= 16650 × 8/100
= 133200/100
= $1332
Thus, Simple Interest = $1332
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 = $5550 + $1332
= $6882
Thus, Amount to be paid = $6882 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 = $5550
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5550 + ($5550 × 3% × 8)
= $5550 + ($5550 ×3/100 × 8)
= $5550 + (5550 × 3 × 8/100)
= $5550 + (16650 × 8/100)
= $5550 + (133200/100)
= $5550 + $1332 = $6882
Thus, Amount (A) to be paid = $6882 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 $5550, the simple interest in 1 year
= 3/100 × 5550
= 3 × 5550/100
= 16650/100 = $166.5
Thus, simple interest for 1 year = $166.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $166.5 × 8 = $1332
Thus, Simple Interest (SI) = $1332
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $1332
= $6882
Thus, Amount to be paid = $6882 Answer
Similar Questions
(1) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(2) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(3) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.
(5) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.
(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.
(7) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(8) If Christopher paid $4800 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) How much loan did Joseph borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6270 to clear it?
(10) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.