Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
Correct Answer
$9102
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 8% × 8
= $5550 ×8/100 × 8
= 5550 × 8 × 8/100
= 44400 × 8/100
= 355200/100
= $3552
Thus, Simple Interest = $3552
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 = $5550 + $3552
= $9102
Thus, Amount to be paid = $9102 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 = $5550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5550 + ($5550 × 8% × 8)
= $5550 + ($5550 ×8/100 × 8)
= $5550 + (5550 × 8 × 8/100)
= $5550 + (44400 × 8/100)
= $5550 + (355200/100)
= $5550 + $3552 = $9102
Thus, Amount (A) to be paid = $9102 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 $5550, the simple interest in 1 year
= 8/100 × 5550
= 8 × 5550/100
= 44400/100 = $444
Thus, simple interest for 1 year = $444
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $444 × 8 = $3552
Thus, Simple Interest (SI) = $3552
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3552
= $9102
Thus, Amount to be paid = $9102 Answer
Similar Questions
(1) In how much time a principal of $3050 will amount to $3233 at a simple interest of 3% per annum?
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 3 years.
(3) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?
(4) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 8% simple interest?
(5) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7647.5 to clear it?
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 3% simple interest?
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(8) In how much time a principal of $3150 will amount to $3339 at a simple interest of 2% per annum?
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 7 years.