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) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?
(2) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(3) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 7 years.
(6) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(8) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(9) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 9% simple interest?
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?