Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 8 years.
Correct Answer
$9204
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 7% × 8
= $5900 ×7/100 × 8
= 5900 × 7 × 8/100
= 41300 × 8/100
= 330400/100
= $3304
Thus, Simple Interest = $3304
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 + $3304
= $9204
Thus, Amount to be paid = $9204 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) = 7%
And, Time (t) = 8 years
Thus, Amount (A)
= $5900 + ($5900 × 7% × 8)
= $5900 + ($5900 ×7/100 × 8)
= $5900 + (5900 × 7 × 8/100)
= $5900 + (41300 × 8/100)
= $5900 + (330400/100)
= $5900 + $3304 = $9204
Thus, Amount (A) to be paid = $9204 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 $5900, the simple interest in 1 year
= 7/100 × 5900
= 7 × 5900/100
= 41300/100 = $413
Thus, simple interest for 1 year = $413
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $413 × 8 = $3304
Thus, Simple Interest (SI) = $3304
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $3304
= $9204
Thus, Amount to be paid = $9204 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.
(2) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) If Ashley paid $5278 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(5) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(8) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(9) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(10) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?