Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 8 years.
Correct Answer
$6944
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 3% × 8
= $5600 ×3/100 × 8
= 5600 × 3 × 8/100
= 16800 × 8/100
= 134400/100
= $1344
Thus, Simple Interest = $1344
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 = $5600 + $1344
= $6944
Thus, Amount to be paid = $6944 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 = $5600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 3% × 8)
= $5600 + ($5600 ×3/100 × 8)
= $5600 + (5600 × 3 × 8/100)
= $5600 + (16800 × 8/100)
= $5600 + (134400/100)
= $5600 + $1344 = $6944
Thus, Amount (A) to be paid = $6944 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 $5600, the simple interest in 1 year
= 3/100 × 5600
= 3 × 5600/100
= 16800/100 = $168
Thus, simple interest for 1 year = $168
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $168 × 8 = $1344
Thus, Simple Interest (SI) = $1344
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1344
= $6944
Thus, Amount to be paid = $6944 Answer
Similar Questions
(1) How much loan did Barbara borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6937.5 to clear it?
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
(3) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?
(5) In how much time a principal of $3000 will amount to $3450 at a simple interest of 5% per annum?
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(7) If Sarah paid $4312 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?
(10) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 7 years.