Question:
Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 8 years.
Correct Answer
$7260
Solution And Explanation
Solution
Given,
Principal (P) = $5500
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) = $5500 × 4% × 8
= $5500 ×4/100 × 8
= 5500 × 4 × 8/100
= 22000 × 8/100
= 176000/100
= $1760
Thus, Simple Interest = $1760
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 = $5500 + $1760
= $7260
Thus, Amount to be paid = $7260 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 = $5500
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5500 + ($5500 × 4% × 8)
= $5500 + ($5500 ×4/100 × 8)
= $5500 + (5500 × 4 × 8/100)
= $5500 + (22000 × 8/100)
= $5500 + (176000/100)
= $5500 + $1760 = $7260
Thus, Amount (A) to be paid = $7260 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 $5500, the simple interest in 1 year
= 4/100 × 5500
= 4 × 5500/100
= 22000/100 = $220
Thus, simple interest for 1 year = $220
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $220 × 8 = $1760
Thus, Simple Interest (SI) = $1760
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $1760
= $7260
Thus, Amount to be paid = $7260 Answer
Similar Questions
(1) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 7 years.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?
(3) What amount does William have to pay after 5 years if he takes a loan of $3500 at 10% simple interest?
(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 2% simple interest?
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(6) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.
(9) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 2% simple interest for 4 years.