Question:
What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
Correct Answer
$4860
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 7%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $3600 × 7% × 5
= $3600 ×7/100 × 5
= 3600 × 7 × 5/100
= 25200 × 5/100
= 126000/100
= $1260
Thus, Simple Interest = $1260
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 = $3600 + $1260
= $4860
Thus, Amount to be paid = $4860 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 = $3600
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3600 + ($3600 × 7% × 5)
= $3600 + ($3600 ×7/100 × 5)
= $3600 + (3600 × 7 × 5/100)
= $3600 + (25200 × 5/100)
= $3600 + (126000/100)
= $3600 + $1260 = $4860
Thus, Amount (A) to be paid = $4860 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3600, the simple interest in 1 year
= 7/100 × 3600
= 7 × 3600/100
= 25200/100 = $252
Thus, simple interest for 1 year = $252
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $252 × 5 = $1260
Thus, Simple Interest (SI) = $1260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1260
= $4860
Thus, Amount to be paid = $4860 Answer
Similar Questions
(1) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 8 years.
(3) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10132 to clear the loan, then find the time period of the loan.
(5) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 5% simple interest?
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(8) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.
(10) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9310 to clear the loan, then find the time period of the loan.