Question:
What amount does William have to pay after 6 years if he takes a loan of $3500 at 7% simple interest?
Correct Answer
$4970
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 7%
Time (t) = 6 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) = $3500 × 7% × 6
= $3500 ×7/100 × 6
= 3500 × 7 × 6/100
= 24500 × 6/100
= 147000/100
= $1470
Thus, Simple Interest = $1470
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 = $3500 + $1470
= $4970
Thus, Amount to be paid = $4970 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 = $3500
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3500 + ($3500 × 7% × 6)
= $3500 + ($3500 ×7/100 × 6)
= $3500 + (3500 × 7 × 6/100)
= $3500 + (24500 × 6/100)
= $3500 + (147000/100)
= $3500 + $1470 = $4970
Thus, Amount (A) to be paid = $4970 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 $3500, the simple interest in 1 year
= 7/100 × 3500
= 7 × 3500/100
= 24500/100 = $245
Thus, simple interest for 1 year = $245
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $245 × 6 = $1470
Thus, Simple Interest (SI) = $1470
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1470
= $4970
Thus, Amount to be paid = $4970 Answer
Similar Questions
(1) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 3 years.
(4) What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?
(5) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?
(6) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 9% simple interest?
(7) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.