Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
Correct Answer
$10440
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 10% × 8
= $5800 ×10/100 × 8
= 5800 × 10 × 8/100
= 58000 × 8/100
= 464000/100
= $4640
Thus, Simple Interest = $4640
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 + $4640
= $10440
Thus, Amount to be paid = $10440 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) = 10%
And, Time (t) = 8 years
Thus, Amount (A)
= $5800 + ($5800 × 10% × 8)
= $5800 + ($5800 ×10/100 × 8)
= $5800 + (5800 × 10 × 8/100)
= $5800 + (58000 × 8/100)
= $5800 + (464000/100)
= $5800 + $4640 = $10440
Thus, Amount (A) to be paid = $10440 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 $5800, the simple interest in 1 year
= 10/100 × 5800
= 10 × 5800/100
= 58000/100 = $580
Thus, simple interest for 1 year = $580
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $580 × 8 = $4640
Thus, Simple Interest (SI) = $4640
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $4640
= $10440
Thus, Amount to be paid = $10440 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
(3) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 8 years.
(5) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(6) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
(8) If Joseph paid $3996 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?
(10) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.