Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 8 years.
Correct Answer
$8610
Solution And Explanation
Solution
Given,
Principal (P) = $5250
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) = $5250 × 8% × 8
= $5250 ×8/100 × 8
= 5250 × 8 × 8/100
= 42000 × 8/100
= 336000/100
= $3360
Thus, Simple Interest = $3360
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 = $5250 + $3360
= $8610
Thus, Amount to be paid = $8610 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 = $5250
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 8% × 8)
= $5250 + ($5250 ×8/100 × 8)
= $5250 + (5250 × 8 × 8/100)
= $5250 + (42000 × 8/100)
= $5250 + (336000/100)
= $5250 + $3360 = $8610
Thus, Amount (A) to be paid = $8610 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 $5250, the simple interest in 1 year
= 8/100 × 5250
= 8 × 5250/100
= 42000/100 = $420
Thus, simple interest for 1 year = $420
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $420 × 8 = $3360
Thus, Simple Interest (SI) = $3360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $3360
= $8610
Thus, Amount to be paid = $8610 Answer
Similar Questions
(1) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 8% simple interest?
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(3) In how much time a principal of $3100 will amount to $3472 at a simple interest of 3% per annum?
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 4 years.
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 4 years.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.
(7) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(8) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?
(9) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.
(10) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.