Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 8 years.
Correct Answer
$7840
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 5% × 8
= $5600 ×5/100 × 8
= 5600 × 5 × 8/100
= 28000 × 8/100
= 224000/100
= $2240
Thus, Simple Interest = $2240
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 = $5600 + $2240
= $7840
Thus, Amount to be paid = $7840 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 = $5600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 5% × 8)
= $5600 + ($5600 ×5/100 × 8)
= $5600 + (5600 × 5 × 8/100)
= $5600 + (28000 × 8/100)
= $5600 + (224000/100)
= $5600 + $2240 = $7840
Thus, Amount (A) to be paid = $7840 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 $5600, the simple interest in 1 year
= 5/100 × 5600
= 5 × 5600/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $280 × 8 = $2240
Thus, Simple Interest (SI) = $2240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $2240
= $7840
Thus, Amount to be paid = $7840 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
(2) If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.
(5) What amount will be due after 2 years if David borrowed a sum of $3200 at a 9% simple interest?
(6) Betty had to pay $4887.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 3 years.
(10) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.