Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 8 years.
Correct Answer
$7392
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 4% × 8
= $5600 ×4/100 × 8
= 5600 × 4 × 8/100
= 22400 × 8/100
= 179200/100
= $1792
Thus, Simple Interest = $1792
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 = $5600 + $1792
= $7392
Thus, Amount to be paid = $7392 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 = $5600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 4% × 8)
= $5600 + ($5600 ×4/100 × 8)
= $5600 + (5600 × 4 × 8/100)
= $5600 + (22400 × 8/100)
= $5600 + (179200/100)
= $5600 + $1792 = $7392
Thus, Amount (A) to be paid = $7392 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 $5600, the simple interest in 1 year
= 4/100 × 5600
= 4 × 5600/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $224 × 8 = $1792
Thus, Simple Interest (SI) = $1792
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1792
= $7392
Thus, Amount to be paid = $7392 Answer
Similar Questions
(1) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
(3) How much loan did George borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9125 to clear it?
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 7 years.
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(6) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?
(7) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 9% simple interest?
(9) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.