Question:
( 1 of 10 ) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$5300
Correct Answer
$8692
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 8% × 8
= $5300 ×8/100 × 8
= 5300 × 8 × 8/100
= 42400 × 8/100
= 339200/100
= $3392
Thus, Simple Interest = $3392
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 = $5300 + $3392
= $8692
Thus, Amount to be paid = $8692 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 = $5300
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5300 + ($5300 × 8% × 8)
= $5300 + ($5300 ×8/100 × 8)
= $5300 + (5300 × 8 × 8/100)
= $5300 + (42400 × 8/100)
= $5300 + (339200/100)
= $5300 + $3392 = $8692
Thus, Amount (A) to be paid = $8692 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 $5300, the simple interest in 1 year
= 8/100 × 5300
= 8 × 5300/100
= 42400/100 = $424
Thus, simple interest for 1 year = $424
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $424 × 8 = $3392
Thus, Simple Interest (SI) = $3392
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $3392
= $8692
Thus, Amount to be paid = $8692 Answer
Similar Questions
(1) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(2) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 7 years.
(5) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 3 years.
(7) How much loan did Joshua borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8280 to clear it?
(8) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.
(9) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(10) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6037.5 to clear it?