Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.
Correct Answer
$10080
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 10% × 8
= $5600 ×10/100 × 8
= 5600 × 10 × 8/100
= 56000 × 8/100
= 448000/100
= $4480
Thus, Simple Interest = $4480
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 + $4480
= $10080
Thus, Amount to be paid = $10080 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) = 10%
And, Time (t) = 8 years
Thus, Amount (A)
= $5600 + ($5600 × 10% × 8)
= $5600 + ($5600 ×10/100 × 8)
= $5600 + (5600 × 10 × 8/100)
= $5600 + (56000 × 8/100)
= $5600 + (448000/100)
= $5600 + $4480 = $10080
Thus, Amount (A) to be paid = $10080 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 $5600, the simple interest in 1 year
= 10/100 × 5600
= 10 × 5600/100
= 56000/100 = $560
Thus, simple interest for 1 year = $560
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $560 × 8 = $4480
Thus, Simple Interest (SI) = $4480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $4480
= $10080
Thus, Amount to be paid = $10080 Answer
Similar Questions
(1) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.
(3) Daniel had to pay $4469 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(5) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 8 years.
(7) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Calculate the amount due if John borrowed a sum of $3200 at 4% simple interest for 4 years.
(9) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(10) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.