Question:
Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 7 years.
Correct Answer
$6270
Solution And Explanation
Solution
Given,
Principal (P) = $5500
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) = $5500 × 2% × 7
= $5500 ×2/100 × 7
= 5500 × 2 × 7/100
= 11000 × 7/100
= 77000/100
= $770
Thus, Simple Interest = $770
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 = $5500 + $770
= $6270
Thus, Amount to be paid = $6270 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 = $5500
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5500 + ($5500 × 2% × 7)
= $5500 + ($5500 ×2/100 × 7)
= $5500 + (5500 × 2 × 7/100)
= $5500 + (11000 × 7/100)
= $5500 + (77000/100)
= $5500 + $770 = $6270
Thus, Amount (A) to be paid = $6270 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 $5500, the simple interest in 1 year
= 2/100 × 5500
= 2 × 5500/100
= 11000/100 = $110
Thus, simple interest for 1 year = $110
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $110 × 7 = $770
Thus, Simple Interest (SI) = $770
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $770
= $6270
Thus, Amount to be paid = $6270 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 8 years.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 3 years.
(7) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
(9) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.