Question:
Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 8 years.
Correct Answer
$7590
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 4% × 8
= $5750 ×4/100 × 8
= 5750 × 4 × 8/100
= 23000 × 8/100
= 184000/100
= $1840
Thus, Simple Interest = $1840
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 = $5750 + $1840
= $7590
Thus, Amount to be paid = $7590 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 = $5750
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5750 + ($5750 × 4% × 8)
= $5750 + ($5750 ×4/100 × 8)
= $5750 + (5750 × 4 × 8/100)
= $5750 + (23000 × 8/100)
= $5750 + (184000/100)
= $5750 + $1840 = $7590
Thus, Amount (A) to be paid = $7590 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 $5750, the simple interest in 1 year
= 4/100 × 5750
= 4 × 5750/100
= 23000/100 = $230
Thus, simple interest for 1 year = $230
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $230 × 8 = $1840
Thus, Simple Interest (SI) = $1840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $1840
= $7590
Thus, Amount to be paid = $7590 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $13000 to clear the loan, then find the time period of the loan.
(2) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(4) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?
(5) If Margaret paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(7) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(8) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(10) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.