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) Find the amount to be paid if Robert borrowed a sum of $5100 at 6% simple interest for 7 years.
(2) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(5) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
(7) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?
(8) If Kenneth paid $5800 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 4 years.
(10) David had to pay $3604 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.