Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 8 years.
Correct Answer
$7918
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 6%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $5350 × 6% × 8
= $5350 ×6/100 × 8
= 5350 × 6 × 8/100
= 32100 × 8/100
= 256800/100
= $2568
Thus, Simple Interest = $2568
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 = $5350 + $2568
= $7918
Thus, Amount to be paid = $7918 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 = $5350
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $5350 + ($5350 × 6% × 8)
= $5350 + ($5350 ×6/100 × 8)
= $5350 + (5350 × 6 × 8/100)
= $5350 + (32100 × 8/100)
= $5350 + (256800/100)
= $5350 + $2568 = $7918
Thus, Amount (A) to be paid = $7918 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $5350, the simple interest in 1 year
= 6/100 × 5350
= 6 × 5350/100
= 32100/100 = $321
Thus, simple interest for 1 year = $321
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $321 × 8 = $2568
Thus, Simple Interest (SI) = $2568
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $2568
= $7918
Thus, Amount to be paid = $7918 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 7 years.
(3) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(4) Anthony had to pay $4687 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Lisa had to pay $4293 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(7) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 2% simple interest?
(8) Richard had to pay $3924 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
(10) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.