Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.
Correct Answer
$7788
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 4% × 8
= $5900 ×4/100 × 8
= 5900 × 4 × 8/100
= 23600 × 8/100
= 188800/100
= $1888
Thus, Simple Interest = $1888
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 = $5900 + $1888
= $7788
Thus, Amount to be paid = $7788 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 = $5900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5900 + ($5900 × 4% × 8)
= $5900 + ($5900 ×4/100 × 8)
= $5900 + (5900 × 4 × 8/100)
= $5900 + (23600 × 8/100)
= $5900 + (188800/100)
= $5900 + $1888 = $7788
Thus, Amount (A) to be paid = $7788 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 $5900, the simple interest in 1 year
= 4/100 × 5900
= 4 × 5900/100
= 23600/100 = $236
Thus, simple interest for 1 year = $236
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $236 × 8 = $1888
Thus, Simple Interest (SI) = $1888
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $1888
= $7788
Thus, Amount to be paid = $7788 Answer
Similar Questions
(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(3) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 2% simple interest?
(4) How much loan did Andrew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8160 to clear it?
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(6) 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.
(7) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 9% simple interest?
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 3 years.
(9) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 4 years.
(10) If Mark paid $5280 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.