Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.
Correct Answer
$8288
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 6% × 8
= $5600 ×6/100 × 8
= 5600 × 6 × 8/100
= 33600 × 8/100
= 268800/100
= $2688
Thus, Simple Interest = $2688
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 + $2688
= $8288
Thus, Amount to be paid = $8288 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) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 6% × 8)
= $5600 + ($5600 ×6/100 × 8)
= $5600 + (5600 × 6 × 8/100)
= $5600 + (33600 × 8/100)
= $5600 + (268800/100)
= $5600 + $2688 = $8288
Thus, Amount (A) to be paid = $8288 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 $5600, the simple interest in 1 year
= 6/100 × 5600
= 6 × 5600/100
= 33600/100 = $336
Thus, simple interest for 1 year = $336
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $336 × 8 = $2688
Thus, Simple Interest (SI) = $2688
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $2688
= $8288
Thus, Amount to be paid = $8288 Answer
Similar Questions
(1) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 8 years.
(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) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 3 years.
(5) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9685 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(7) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?
(10) How much loan did Joseph borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7125 to clear it?