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) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 3 years.
(5) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(6) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(7) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 4 years.
(9) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.