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) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(2) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 7 years.
(3) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?
(8) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 3 years.
(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.