Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.
Correct Answer
$6384
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 2% × 7
= $5600 ×2/100 × 7
= 5600 × 2 × 7/100
= 11200 × 7/100
= 78400/100
= $784
Thus, Simple Interest = $784
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 = $5600 + $784
= $6384
Thus, Amount to be paid = $6384 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 = $5600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 2% × 7)
= $5600 + ($5600 ×2/100 × 7)
= $5600 + (5600 × 2 × 7/100)
= $5600 + (11200 × 7/100)
= $5600 + (78400/100)
= $5600 + $784 = $6384
Thus, Amount (A) to be paid = $6384 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 $5600, the simple interest in 1 year
= 2/100 × 5600
= 2 × 5600/100
= 11200/100 = $112
Thus, simple interest for 1 year = $112
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $112 × 7 = $784
Thus, Simple Interest (SI) = $784
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $784
= $6384
Thus, Amount to be paid = $6384 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 4 years.
(2) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(4) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?
(5) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?
(6) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(7) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?
(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(9) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.