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) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?
(2) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(4) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 3% simple interest?
(7) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(8) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.
(10) If Michael paid $3696 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.