Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.
Correct Answer
$9202
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 9% × 8
= $5350 ×9/100 × 8
= 5350 × 9 × 8/100
= 48150 × 8/100
= 385200/100
= $3852
Thus, Simple Interest = $3852
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 = $5350 + $3852
= $9202
Thus, Amount to be paid = $9202 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 = $5350
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 8 years
Thus, Amount (A)
= $5350 + ($5350 × 9% × 8)
= $5350 + ($5350 ×9/100 × 8)
= $5350 + (5350 × 9 × 8/100)
= $5350 + (48150 × 8/100)
= $5350 + (385200/100)
= $5350 + $3852 = $9202
Thus, Amount (A) to be paid = $9202 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 $5350, the simple interest in 1 year
= 9/100 × 5350
= 9 × 5350/100
= 48150/100 = $481.5
Thus, simple interest for 1 year = $481.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $481.5 × 8 = $3852
Thus, Simple Interest (SI) = $3852
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $3852
= $9202
Thus, Amount to be paid = $9202 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(2) How much loan did Ashley borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8187.5 to clear it?
(3) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.
(4) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 3% simple interest?
(5) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(8) Barbara had to pay $3976 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(10) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.