Question:
( 1 of 10 ) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 8 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$5300
Correct Answer
$7420
Solution And Explanation
Solution
Given,
Principal (P) = $5300
Rate of Simple Interest (SI) = 5%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $5300 × 5% × 8
= $5300 ×5/100 × 8
= 5300 × 5 × 8/100
= 26500 × 8/100
= 212000/100
= $2120
Thus, Simple Interest = $2120
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 = $5300 + $2120
= $7420
Thus, Amount to be paid = $7420 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 = $5300
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 8 years
Thus, Amount (A)
= $5300 + ($5300 × 5% × 8)
= $5300 + ($5300 ×5/100 × 8)
= $5300 + (5300 × 5 × 8/100)
= $5300 + (26500 × 8/100)
= $5300 + (212000/100)
= $5300 + $2120 = $7420
Thus, Amount (A) to be paid = $7420 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $5300, the simple interest in 1 year
= 5/100 × 5300
= 5 × 5300/100
= 26500/100 = $265
Thus, simple interest for 1 year = $265
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $265 × 8 = $2120
Thus, Simple Interest (SI) = $2120
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $2120
= $7420
Thus, Amount to be paid = $7420 Answer
Similar Questions
(1) Find the amount to be paid if Christopher borrowed a sum of $6000 at 5% simple interest for 8 years.
(2) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(3) How much loan did Ryan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9085 to clear it?
(4) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.
(6) If Susan borrowed $3650 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(8) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if John borrowed a sum of $3200 at 4% simple interest for 3 years.
(10) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 6% simple interest?