Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.
Correct Answer
$8774
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 8% × 8
= $5350 ×8/100 × 8
= 5350 × 8 × 8/100
= 42800 × 8/100
= 342400/100
= $3424
Thus, Simple Interest = $3424
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 = $5350 + $3424
= $8774
Thus, Amount to be paid = $8774 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 = $5350
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5350 + ($5350 × 8% × 8)
= $5350 + ($5350 ×8/100 × 8)
= $5350 + (5350 × 8 × 8/100)
= $5350 + (42800 × 8/100)
= $5350 + (342400/100)
= $5350 + $3424 = $8774
Thus, Amount (A) to be paid = $8774 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 $5350, the simple interest in 1 year
= 8/100 × 5350
= 8 × 5350/100
= 42800/100 = $428
Thus, simple interest for 1 year = $428
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $428 × 8 = $3424
Thus, Simple Interest (SI) = $3424
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $3424
= $8774
Thus, Amount to be paid = $8774 Answer
Similar Questions
(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 10% simple interest?
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 8% simple interest?
(5) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(7) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 4% simple interest?
(8) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.
(9) 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.
(10) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.