A loan of $8000 is taken at a simple interest rate of 7% per annum. What will be

₹0.0

Question: A loan of $8000 is taken at a simple interest rate of 7% per annum. What will be the total amount to be paid back after 4 years?

Options:

Correct Answer: $8800

Solution:

Total Amount = Principal + SI = 8000 + (8000 × 7 × 4 / 100) = 8000 + 2240 = $10240.

A loan of $8000 is taken at a simple interest rate of 7% per annum. What will be the total amount to be paid back after 4 years?

A loan of $8000 is taken at a simple interest rate of 7% per annum. What will be the total amount to be paid back after 4 years?

Step 1: Identify the principal amount (the initial loan). In this case, it is $8000.
Step 2: Identify the interest rate. Here, it is 7% per annum.
Step 3: Identify the time period for the loan. In this case, it is 4 years.
Step 4: Calculate the simple interest (SI) using the formula: SI = Principal × Rate × Time / 100.
Step 5: Substitute the values into the formula: SI = 8000 × 7 × 4 / 100.
Step 6: Calculate the interest: SI = 8000 × 28 / 100 = 2240.
Step 7: Calculate the total amount to be paid back by adding the principal and the interest: Total Amount = Principal + SI.
Step 8: Substitute the values: Total Amount = 8000 + 2240.
Step 9: Calculate the total amount: Total Amount = 10240.

Simple Interest Calculation – Understanding how to calculate simple interest using the formula SI = Principal × Rate × Time.
Total Amount Calculation – Knowing how to find the total amount to be paid back by adding the principal to the calculated simple interest.