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) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 9% simple interest?
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 8 years.
(3) In how much time a principal of $3200 will amount to $3456 at a simple interest of 4% per annum?
(4) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(5) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 10% simple interest?
(7) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(8) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(9) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(10) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8493 to clear the loan, then find the time period of the loan.