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) How much loan did Jessica borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6900 to clear it?
(2) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.
(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
(4) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
(5) Lisa had to pay $4657.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(7) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 3 years.
(8) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?
(9) Michael had to pay $3696 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?