Question:
Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 8 years.
Correct Answer
$6666
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 4%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $5050 × 4% × 8
= $5050 ×4/100 × 8
= 5050 × 4 × 8/100
= 20200 × 8/100
= 161600/100
= $1616
Thus, Simple Interest = $1616
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 = $5050 + $1616
= $6666
Thus, Amount to be paid = $6666 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 = $5050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5050 + ($5050 × 4% × 8)
= $5050 + ($5050 ×4/100 × 8)
= $5050 + (5050 × 4 × 8/100)
= $5050 + (20200 × 8/100)
= $5050 + (161600/100)
= $5050 + $1616 = $6666
Thus, Amount (A) to be paid = $6666 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5050, the simple interest in 1 year
= 4/100 × 5050
= 4 × 5050/100
= 20200/100 = $202
Thus, simple interest for 1 year = $202
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $202 × 8 = $1616
Thus, Simple Interest (SI) = $1616
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $1616
= $6666
Thus, Amount to be paid = $6666 Answer
Similar Questions
(1) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.
(4) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(5) In how much time a principal of $3200 will amount to $3680 at a simple interest of 3% per annum?
(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(7) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 8% simple interest.
(8) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 4 years.
(9) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?
(10) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.