Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 8 years.
Correct Answer
$9184
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 8% × 8
= $5600 ×8/100 × 8
= 5600 × 8 × 8/100
= 44800 × 8/100
= 358400/100
= $3584
Thus, Simple Interest = $3584
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 = $5600 + $3584
= $9184
Thus, Amount to be paid = $9184 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 = $5600
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 8% × 8)
= $5600 + ($5600 ×8/100 × 8)
= $5600 + (5600 × 8 × 8/100)
= $5600 + (44800 × 8/100)
= $5600 + (358400/100)
= $5600 + $3584 = $9184
Thus, Amount (A) to be paid = $9184 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 $5600, the simple interest in 1 year
= 8/100 × 5600
= 8 × 5600/100
= 44800/100 = $448
Thus, simple interest for 1 year = $448
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $448 × 8 = $3584
Thus, Simple Interest (SI) = $3584
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $3584
= $9184
Thus, Amount to be paid = $9184 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(2) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(3) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6109 to clear the loan, then find the time period of the loan.
(4) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(5) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?
(6) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
(8) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(9) How much loan did Charles borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6785 to clear it?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.