Question:
Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
Correct Answer
$8528
Solution And Explanation
Solution
Given,
Principal (P) = $5200
Rate of Simple Interest (SI) = 8%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $5200 × 8% × 8
= $5200 ×8/100 × 8
= 5200 × 8 × 8/100
= 41600 × 8/100
= 332800/100
= $3328
Thus, Simple Interest = $3328
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 = $5200 + $3328
= $8528
Thus, Amount to be paid = $8528 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 = $5200
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5200 + ($5200 × 8% × 8)
= $5200 + ($5200 ×8/100 × 8)
= $5200 + (5200 × 8 × 8/100)
= $5200 + (41600 × 8/100)
= $5200 + (332800/100)
= $5200 + $3328 = $8528
Thus, Amount (A) to be paid = $8528 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $5200, the simple interest in 1 year
= 8/100 × 5200
= 8 × 5200/100
= 41600/100 = $416
Thus, simple interest for 1 year = $416
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $416 × 8 = $3328
Thus, Simple Interest (SI) = $3328
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $3328
= $8528
Thus, Amount to be paid = $8528 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 6% simple interest?
(2) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(3) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 6% simple interest?
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?
(5) Steven had to pay $5014 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 8% simple interest?
(7) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.
(10) If Daniel paid $4428 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.