Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.
Correct Answer
$9048
Solution And Explanation
Solution
Given,
Principal (P) = $5800
Rate of Simple Interest (SI) = 7%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 8
= $5800 ×7/100 × 8
= 5800 × 7 × 8/100
= 40600 × 8/100
= 324800/100
= $3248
Thus, Simple Interest = $3248
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 + $3248
= $9048
Thus, Amount to be paid = $9048 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) = 7%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 7% × 8)
= $5800 + ($5800 ×7/100 × 8)
= $5800 + (5800 × 7 × 8/100)
= $5800 + (40600 × 8/100)
= $5800 + (324800/100)
= $5800 + $3248 = $9048
Thus, Amount (A) to be paid = $9048 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5800, the simple interest in 1 year
= 7/100 × 5800
= 7 × 5800/100
= 40600/100 = $406
Thus, simple interest for 1 year = $406
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $406 × 8 = $3248
Thus, Simple Interest (SI) = $3248
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $3248
= $9048
Thus, Amount to be paid = $9048 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(2) If William paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11220 to clear the loan, then find the time period of the loan.
(4) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.
(5) If Margaret paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 5% simple interest for 8 years.
(7) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.
(8) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 10% simple interest?
(9) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11041 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.