Question:
( 1 of 10 ) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$5000
Correct Answer
$9000
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 10%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $5000 × 10% × 8
= $5000 ×10/100 × 8
= 5000 × 10 × 8/100
= 50000 × 8/100
= 400000/100
= $4000
Thus, Simple Interest = $4000
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 = $5000 + $4000
= $9000
Thus, Amount to be paid = $9000 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 = $5000
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 8 years
Thus, Amount (A)
= $5000 + ($5000 × 10% × 8)
= $5000 + ($5000 ×10/100 × 8)
= $5000 + (5000 × 10 × 8/100)
= $5000 + (50000 × 8/100)
= $5000 + (400000/100)
= $5000 + $4000 = $9000
Thus, Amount (A) to be paid = $9000 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $5000, the simple interest in 1 year
= 10/100 × 5000
= 10 × 5000/100
= 50000/100 = $500
Thus, simple interest for 1 year = $500
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $500 × 8 = $4000
Thus, Simple Interest (SI) = $4000
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $4000
= $9000
Thus, Amount to be paid = $9000 Answer
Similar Questions
(1) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.
(2) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(3) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(4) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.
(5) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(7) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(10) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?