Question:
Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 8 years.
Correct Answer
$6732
Solution And Explanation
Solution
Given,
Principal (P) = $5100
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) = $5100 × 4% × 8
= $5100 ×4/100 × 8
= 5100 × 4 × 8/100
= 20400 × 8/100
= 163200/100
= $1632
Thus, Simple Interest = $1632
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 = $5100 + $1632
= $6732
Thus, Amount to be paid = $6732 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 = $5100
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5100 + ($5100 × 4% × 8)
= $5100 + ($5100 ×4/100 × 8)
= $5100 + (5100 × 4 × 8/100)
= $5100 + (20400 × 8/100)
= $5100 + (163200/100)
= $5100 + $1632 = $6732
Thus, Amount (A) to be paid = $6732 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 $5100, the simple interest in 1 year
= 4/100 × 5100
= 4 × 5100/100
= 20400/100 = $204
Thus, simple interest for 1 year = $204
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $204 × 8 = $1632
Thus, Simple Interest (SI) = $1632
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5100 + $1632
= $6732
Thus, Amount to be paid = $6732 Answer
Similar Questions
(1) In how much time a principal of $3200 will amount to $3328 at a simple interest of 2% per annum?
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(4) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?
(5) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(7) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
(8) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(9) If Jessica paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.