Question:
Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.
Correct Answer
$8858
Solution And Explanation
Solution
Given,
Principal (P) = $5150
Rate of Simple Interest (SI) = 9%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $5150 × 9% × 8
= $5150 ×9/100 × 8
= 5150 × 9 × 8/100
= 46350 × 8/100
= 370800/100
= $3708
Thus, Simple Interest = $3708
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 = $5150 + $3708
= $8858
Thus, Amount to be paid = $8858 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 = $5150
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 8 years
Thus, Amount (A)
= $5150 + ($5150 × 9% × 8)
= $5150 + ($5150 ×9/100 × 8)
= $5150 + (5150 × 9 × 8/100)
= $5150 + (46350 × 8/100)
= $5150 + (370800/100)
= $5150 + $3708 = $8858
Thus, Amount (A) to be paid = $8858 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $5150, the simple interest in 1 year
= 9/100 × 5150
= 9 × 5150/100
= 46350/100 = $463.5
Thus, simple interest for 1 year = $463.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $463.5 × 8 = $3708
Thus, Simple Interest (SI) = $3708
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5150 + $3708
= $8858
Thus, Amount to be paid = $8858 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
(2) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.
(6) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(8) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(10) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 3 years.