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) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.
(2) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(3) Jessica had to pay $4200 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Jessica had to pay $4087.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(7) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8745 to clear it?
(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?
(10) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.