Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 8 years.
Correct Answer
$7524
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 4% × 8
= $5700 ×4/100 × 8
= 5700 × 4 × 8/100
= 22800 × 8/100
= 182400/100
= $1824
Thus, Simple Interest = $1824
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 = $5700 + $1824
= $7524
Thus, Amount to be paid = $7524 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 = $5700
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5700 + ($5700 × 4% × 8)
= $5700 + ($5700 ×4/100 × 8)
= $5700 + (5700 × 4 × 8/100)
= $5700 + (22800 × 8/100)
= $5700 + (182400/100)
= $5700 + $1824 = $7524
Thus, Amount (A) to be paid = $7524 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 $5700, the simple interest in 1 year
= 4/100 × 5700
= 4 × 5700/100
= 22800/100 = $228
Thus, simple interest for 1 year = $228
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $228 × 8 = $1824
Thus, Simple Interest (SI) = $1824
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $1824
= $7524
Thus, Amount to be paid = $7524 Answer
Similar Questions
(1) If Susan borrowed $3650 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Ashley had to pay $4959.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
(4) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(5) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 9% simple interest?
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 7 years.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(9) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.