Question:
Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.
Correct Answer
$5757
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 2%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $5050 × 2% × 7
= $5050 ×2/100 × 7
= 5050 × 2 × 7/100
= 10100 × 7/100
= 70700/100
= $707
Thus, Simple Interest = $707
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 = $5050 + $707
= $5757
Thus, Amount to be paid = $5757 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 = $5050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5050 + ($5050 × 2% × 7)
= $5050 + ($5050 ×2/100 × 7)
= $5050 + (5050 × 2 × 7/100)
= $5050 + (10100 × 7/100)
= $5050 + (70700/100)
= $5050 + $707 = $5757
Thus, Amount (A) to be paid = $5757 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5050, the simple interest in 1 year
= 2/100 × 5050
= 2 × 5050/100
= 10100/100 = $101
Thus, simple interest for 1 year = $101
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $101 × 7 = $707
Thus, Simple Interest (SI) = $707
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $707
= $5757
Thus, Amount to be paid = $5757 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 9% simple interest.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
(3) In how much time a principal of $3100 will amount to $3348 at a simple interest of 4% per annum?
(4) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8970 to clear it?
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 8 years.
(6) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 8 years.
(9) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 8 years.