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) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) What amount does David have to pay after 5 years if he takes a loan of $3400 at 10% simple interest?
(3) James had to pay $3450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(6) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.
(7) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?
(9) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.