Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.
Correct Answer
$9632
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 9% × 8
= $5600 ×9/100 × 8
= 5600 × 9 × 8/100
= 50400 × 8/100
= 403200/100
= $4032
Thus, Simple Interest = $4032
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 = $5600 + $4032
= $9632
Thus, Amount to be paid = $9632 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 = $5600
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 9% × 8)
= $5600 + ($5600 ×9/100 × 8)
= $5600 + (5600 × 9 × 8/100)
= $5600 + (50400 × 8/100)
= $5600 + (403200/100)
= $5600 + $4032 = $9632
Thus, Amount (A) to be paid = $9632 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 $5600, the simple interest in 1 year
= 9/100 × 5600
= 9 × 5600/100
= 50400/100 = $504
Thus, simple interest for 1 year = $504
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $504 × 8 = $4032
Thus, Simple Interest (SI) = $4032
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $4032
= $9632
Thus, Amount to be paid = $9632 Answer
Similar Questions
(1) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(2) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 5% simple interest?
(4) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(6) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(7) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(8) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 8 years.