Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 8 years.
Correct Answer
$7068
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 3% × 8
= $5700 ×3/100 × 8
= 5700 × 3 × 8/100
= 17100 × 8/100
= 136800/100
= $1368
Thus, Simple Interest = $1368
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 = $5700 + $1368
= $7068
Thus, Amount to be paid = $7068 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 = $5700
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5700 + ($5700 × 3% × 8)
= $5700 + ($5700 ×3/100 × 8)
= $5700 + (5700 × 3 × 8/100)
= $5700 + (17100 × 8/100)
= $5700 + (136800/100)
= $5700 + $1368 = $7068
Thus, Amount (A) to be paid = $7068 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 $5700, the simple interest in 1 year
= 3/100 × 5700
= 3 × 5700/100
= 17100/100 = $171
Thus, simple interest for 1 year = $171
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $171 × 8 = $1368
Thus, Simple Interest (SI) = $1368
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $1368
= $7068
Thus, Amount to be paid = $7068 Answer
Similar Questions
(1) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 5% simple interest?
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
(3) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(6) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.
(7) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 3 years.
(8) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) In how much time a principal of $3200 will amount to $3328 at a simple interest of 2% per annum?
(10) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 7 years.