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) 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?
(2) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(4) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8050 to clear it?
(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 3 years.
(7) How much loan did Donald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7800 to clear it?
(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(9) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.