Question:
Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.
Correct Answer
$6441
Solution And Explanation
Solution
Given,
Principal (P) = $5650
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) = $5650 × 2% × 7
= $5650 ×2/100 × 7
= 5650 × 2 × 7/100
= 11300 × 7/100
= 79100/100
= $791
Thus, Simple Interest = $791
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 = $5650 + $791
= $6441
Thus, Amount to be paid = $6441 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 = $5650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5650 + ($5650 × 2% × 7)
= $5650 + ($5650 ×2/100 × 7)
= $5650 + (5650 × 2 × 7/100)
= $5650 + (11300 × 7/100)
= $5650 + (79100/100)
= $5650 + $791 = $6441
Thus, Amount (A) to be paid = $6441 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 $5650, the simple interest in 1 year
= 2/100 × 5650
= 2 × 5650/100
= 11300/100 = $113
Thus, simple interest for 1 year = $113
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $113 × 7 = $791
Thus, Simple Interest (SI) = $791
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5650 + $791
= $6441
Thus, Amount to be paid = $6441 Answer
Similar Questions
(1) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?
(2) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $13000 to clear the loan, then find the time period of the loan.
(3) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?
(5) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(6) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 6% simple interest?
(8) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(9) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?