Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
Correct Answer
$9512
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 8% × 8
= $5800 ×8/100 × 8
= 5800 × 8 × 8/100
= 46400 × 8/100
= 371200/100
= $3712
Thus, Simple Interest = $3712
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 = $5800 + $3712
= $9512
Thus, Amount to be paid = $9512 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 = $5800
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 8% × 8)
= $5800 + ($5800 ×8/100 × 8)
= $5800 + (5800 × 8 × 8/100)
= $5800 + (46400 × 8/100)
= $5800 + (371200/100)
= $5800 + $3712 = $9512
Thus, Amount (A) to be paid = $9512 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 $5800, the simple interest in 1 year
= 8/100 × 5800
= 8 × 5800/100
= 46400/100 = $464
Thus, simple interest for 1 year = $464
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $464 × 8 = $3712
Thus, Simple Interest (SI) = $3712
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $3712
= $9512
Thus, Amount to be paid = $9512 Answer
Similar Questions
(1) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 4 years.
(2) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 4% simple interest?
(4) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(6) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 8 years.
(8) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?
(9) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.