Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
Correct Answer
$7656
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 4% × 8
= $5800 ×4/100 × 8
= 5800 × 4 × 8/100
= 23200 × 8/100
= 185600/100
= $1856
Thus, Simple Interest = $1856
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 = $5800 + $1856
= $7656
Thus, Amount to be paid = $7656 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 = $5800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 4% × 8)
= $5800 + ($5800 ×4/100 × 8)
= $5800 + (5800 × 4 × 8/100)
= $5800 + (23200 × 8/100)
= $5800 + (185600/100)
= $5800 + $1856 = $7656
Thus, Amount (A) to be paid = $7656 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 $5800, the simple interest in 1 year
= 4/100 × 5800
= 4 × 5800/100
= 23200/100 = $232
Thus, simple interest for 1 year = $232
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $232 × 8 = $1856
Thus, Simple Interest (SI) = $1856
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $1856
= $7656
Thus, Amount to be paid = $7656 Answer
Similar Questions
(1) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 10% simple interest?
(2) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?
(3) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(4) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
(5) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(8) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6562.5 to clear it?
(9) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?