Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 8 years.
Correct Answer
$9676
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 8% × 8
= $5900 ×8/100 × 8
= 5900 × 8 × 8/100
= 47200 × 8/100
= 377600/100
= $3776
Thus, Simple Interest = $3776
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 = $5900 + $3776
= $9676
Thus, Amount to be paid = $9676 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 = $5900
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 8 years
Thus, Amount (A)
= $5900 + ($5900 × 8% × 8)
= $5900 + ($5900 ×8/100 × 8)
= $5900 + (5900 × 8 × 8/100)
= $5900 + (47200 × 8/100)
= $5900 + (377600/100)
= $5900 + $3776 = $9676
Thus, Amount (A) to be paid = $9676 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 $5900, the simple interest in 1 year
= 8/100 × 5900
= 8 × 5900/100
= 47200/100 = $472
Thus, simple interest for 1 year = $472
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $472 × 8 = $3776
Thus, Simple Interest (SI) = $3776
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $3776
= $9676
Thus, Amount to be paid = $9676 Answer
Similar Questions
(1) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(3) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 4 years.
(4) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?
(5) What amount does David have to pay after 5 years if he takes a loan of $3400 at 10% simple interest?
(6) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(7) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 3 years.
(8) In how much time a principal of $3100 will amount to $3875 at a simple interest of 5% per annum?
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(10) What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?