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) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?
(2) In how much time a principal of $3200 will amount to $3392 at a simple interest of 2% per annum?
(3) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(4) If Donald paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 7 years.
(7) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 3 years.
(8) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.