Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
Correct Answer
$6099
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 2% × 7
= $5350 ×2/100 × 7
= 5350 × 2 × 7/100
= 10700 × 7/100
= 74900/100
= $749
Thus, Simple Interest = $749
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 = $5350 + $749
= $6099
Thus, Amount to be paid = $6099 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 = $5350
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 2% × 7)
= $5350 + ($5350 ×2/100 × 7)
= $5350 + (5350 × 2 × 7/100)
= $5350 + (10700 × 7/100)
= $5350 + (74900/100)
= $5350 + $749 = $6099
Thus, Amount (A) to be paid = $6099 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 $5350, the simple interest in 1 year
= 2/100 × 5350
= 2 × 5350/100
= 10700/100 = $107
Thus, simple interest for 1 year = $107
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $107 × 7 = $749
Thus, Simple Interest (SI) = $749
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $749
= $6099
Thus, Amount to be paid = $6099 Answer
Similar Questions
(1) How much loan did Paul borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8040 to clear it?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 3 years.
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 4 years.
(4) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.
(5) How much loan did Michael borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5830 to clear it?
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 7 years.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 3 years.
(8) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(9) How much loan did Amanda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8580 to clear it?
(10) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.