Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 8 years.
Correct Answer
$7062
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 4% × 8
= $5350 ×4/100 × 8
= 5350 × 4 × 8/100
= 21400 × 8/100
= 171200/100
= $1712
Thus, Simple Interest = $1712
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 = $5350 + $1712
= $7062
Thus, Amount to be paid = $7062 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 = $5350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5350 + ($5350 × 4% × 8)
= $5350 + ($5350 ×4/100 × 8)
= $5350 + (5350 × 4 × 8/100)
= $5350 + (21400 × 8/100)
= $5350 + (171200/100)
= $5350 + $1712 = $7062
Thus, Amount (A) to be paid = $7062 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 $5350, the simple interest in 1 year
= 4/100 × 5350
= 4 × 5350/100
= 21400/100 = $214
Thus, simple interest for 1 year = $214
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $214 × 8 = $1712
Thus, Simple Interest (SI) = $1712
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1712
= $7062
Thus, Amount to be paid = $7062 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 10% simple interest?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(3) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.
(4) Kenneth had to pay $5750 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 7 years.
(6) If Nancy paid $4814 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.
(8) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(10) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?