Question:
Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 7 years.
Correct Answer
$5814
Solution And Explanation
Solution
Given,
Principal (P) = $5100
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) = $5100 × 2% × 7
= $5100 ×2/100 × 7
= 5100 × 2 × 7/100
= 10200 × 7/100
= 71400/100
= $714
Thus, Simple Interest = $714
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 = $5100 + $714
= $5814
Thus, Amount to be paid = $5814 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 = $5100
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5100 + ($5100 × 2% × 7)
= $5100 + ($5100 ×2/100 × 7)
= $5100 + (5100 × 2 × 7/100)
= $5100 + (10200 × 7/100)
= $5100 + (71400/100)
= $5100 + $714 = $5814
Thus, Amount (A) to be paid = $5814 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 $5100, the simple interest in 1 year
= 2/100 × 5100
= 2 × 5100/100
= 10200/100 = $102
Thus, simple interest for 1 year = $102
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $102 × 7 = $714
Thus, Simple Interest (SI) = $714
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5100 + $714
= $5814
Thus, Amount to be paid = $5814 Answer
Similar Questions
(1) Nancy had to pay $4648 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) 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?
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 3 years.
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 7 years.
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(6) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(7) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.