Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 10% simple interest for 8 years.
Correct Answer
$9630
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 10% × 8
= $5350 ×10/100 × 8
= 5350 × 10 × 8/100
= 53500 × 8/100
= 428000/100
= $4280
Thus, Simple Interest = $4280
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 + $4280
= $9630
Thus, Amount to be paid = $9630 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) = 10%
And, Time (t) = 8 years
Thus, Amount (A)
= $5350 + ($5350 × 10% × 8)
= $5350 + ($5350 ×10/100 × 8)
= $5350 + (5350 × 10 × 8/100)
= $5350 + (53500 × 8/100)
= $5350 + (428000/100)
= $5350 + $4280 = $9630
Thus, Amount (A) to be paid = $9630 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 $5350, the simple interest in 1 year
= 10/100 × 5350
= 10 × 5350/100
= 53500/100 = $535
Thus, simple interest for 1 year = $535
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $535 × 8 = $4280
Thus, Simple Interest (SI) = $4280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $4280
= $9630
Thus, Amount to be paid = $9630 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(2) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(4) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.
(6) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 7% simple interest?
(7) How much loan did Michael borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6625 to clear it?
(8) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 8 years.
(9) How much loan did Nancy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6765 to clear it?
(10) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.