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) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 2% simple interest for 3 years.
(3) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?
(4) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(5) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?
(6) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8170 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 5% simple interest.
(8) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(10) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.