Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 8 years.
Correct Answer
$8584
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 6% × 8
= $5800 ×6/100 × 8
= 5800 × 6 × 8/100
= 34800 × 8/100
= 278400/100
= $2784
Thus, Simple Interest = $2784
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 = $5800 + $2784
= $8584
Thus, Amount to be paid = $8584 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 = $5800
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 6% × 8)
= $5800 + ($5800 ×6/100 × 8)
= $5800 + (5800 × 6 × 8/100)
= $5800 + (34800 × 8/100)
= $5800 + (278400/100)
= $5800 + $2784 = $8584
Thus, Amount (A) to be paid = $8584 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 $5800, the simple interest in 1 year
= 6/100 × 5800
= 6 × 5800/100
= 34800/100 = $348
Thus, simple interest for 1 year = $348
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $348 × 8 = $2784
Thus, Simple Interest (SI) = $2784
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $2784
= $8584
Thus, Amount to be paid = $8584 Answer
Similar Questions
(1) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?
(2) How much loan did Paul borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8040 to clear it?
(3) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 4 years.
(5) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(6) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(7) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?
(9) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(10) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.