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) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.
(3) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(4) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(5) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(6) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.
(8) How much loan did Donald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7475 to clear it?
(9) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 4 years.
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.