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) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(3) If Daniel paid $4756 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 3 years.
(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.
(7) How much loan did Donna borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7877.5 to clear it?
(8) Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 9% simple interest?
(10) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $5848 to clear the loan, then find the time period of the loan.