Question:
Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 7 years.
Correct Answer
$5871
Solution And Explanation
Solution
Given,
Principal (P) = $5150
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) = $5150 × 2% × 7
= $5150 ×2/100 × 7
= 5150 × 2 × 7/100
= 10300 × 7/100
= 72100/100
= $721
Thus, Simple Interest = $721
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 = $5150 + $721
= $5871
Thus, Amount to be paid = $5871 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 = $5150
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5150 + ($5150 × 2% × 7)
= $5150 + ($5150 ×2/100 × 7)
= $5150 + (5150 × 2 × 7/100)
= $5150 + (10300 × 7/100)
= $5150 + (72100/100)
= $5150 + $721 = $5871
Thus, Amount (A) to be paid = $5871 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 $5150, the simple interest in 1 year
= 2/100 × 5150
= 2 × 5150/100
= 10300/100 = $103
Thus, simple interest for 1 year = $103
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $103 × 7 = $721
Thus, Simple Interest (SI) = $721
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5150 + $721
= $5871
Thus, Amount to be paid = $5871 Answer
Similar Questions
(1) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 4 years.
(2) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(3) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(4) How much loan did Barbara borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6660 to clear it?
(5) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(6) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 7 years.
(8) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.
(9) How much loan did Anthony borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7245 to clear it?
(10) How much loan did Jason borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9240 to clear it?