Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
Correct Answer
$8436
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 6% × 8
= $5700 ×6/100 × 8
= 5700 × 6 × 8/100
= 34200 × 8/100
= 273600/100
= $2736
Thus, Simple Interest = $2736
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 = $5700 + $2736
= $8436
Thus, Amount to be paid = $8436 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 = $5700
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $5700 + ($5700 × 6% × 8)
= $5700 + ($5700 ×6/100 × 8)
= $5700 + (5700 × 6 × 8/100)
= $5700 + (34200 × 8/100)
= $5700 + (273600/100)
= $5700 + $2736 = $8436
Thus, Amount (A) to be paid = $8436 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 $5700, the simple interest in 1 year
= 6/100 × 5700
= 6 × 5700/100
= 34200/100 = $342
Thus, simple interest for 1 year = $342
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $342 × 8 = $2736
Thus, Simple Interest (SI) = $2736
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $2736
= $8436
Thus, Amount to be paid = $8436 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 6% simple interest for 4 years.
(2) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 7 years.
(4) How much loan did Amanda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8580 to clear it?
(5) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 9% simple interest?
(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
(8) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(9) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
(10) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?