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 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(2) If Joshua paid $5684 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(4) If Kimberly paid $5580 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 4 years.
(6) If Daniel paid $4756 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 7 years.
(8) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
(10) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.