Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 8 years.
Correct Answer
$9976
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 9% × 8
= $5800 ×9/100 × 8
= 5800 × 9 × 8/100
= 52200 × 8/100
= 417600/100
= $4176
Thus, Simple Interest = $4176
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 = $5800 + $4176
= $9976
Thus, Amount to be paid = $9976 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 = $5800
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 9% × 8)
= $5800 + ($5800 ×9/100 × 8)
= $5800 + (5800 × 9 × 8/100)
= $5800 + (52200 × 8/100)
= $5800 + (417600/100)
= $5800 + $4176 = $9976
Thus, Amount (A) to be paid = $9976 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 $5800, the simple interest in 1 year
= 9/100 × 5800
= 9 × 5800/100
= 52200/100 = $522
Thus, simple interest for 1 year = $522
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $522 × 8 = $4176
Thus, Simple Interest (SI) = $4176
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $4176
= $9976
Thus, Amount to be paid = $9976 Answer
Similar Questions
(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 7 years.
(2) John had to pay $3584 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 9% simple interest for 3 years.
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?
(6) How much loan did Carol borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7755 to clear it?
(7) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?
(8) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(9) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.