Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
Correct Answer
$8732
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 6% × 8
= $5900 ×6/100 × 8
= 5900 × 6 × 8/100
= 35400 × 8/100
= 283200/100
= $2832
Thus, Simple Interest = $2832
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 = $5900 + $2832
= $8732
Thus, Amount to be paid = $8732 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 = $5900
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $5900 + ($5900 × 6% × 8)
= $5900 + ($5900 ×6/100 × 8)
= $5900 + (5900 × 6 × 8/100)
= $5900 + (35400 × 8/100)
= $5900 + (283200/100)
= $5900 + $2832 = $8732
Thus, Amount (A) to be paid = $8732 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 $5900, the simple interest in 1 year
= 6/100 × 5900
= 6 × 5900/100
= 35400/100 = $354
Thus, simple interest for 1 year = $354
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $354 × 8 = $2832
Thus, Simple Interest (SI) = $2832
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $2832
= $8732
Thus, Amount to be paid = $8732 Answer
Similar Questions
(1) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 7% simple interest?
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 4 years.
(3) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.
(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.
(6) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6930 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 5% simple interest?
(8) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.
(9) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?
(10) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 10% simple interest.