Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.
Correct Answer
$6498
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 2% × 7
= $5700 ×2/100 × 7
= 5700 × 2 × 7/100
= 11400 × 7/100
= 79800/100
= $798
Thus, Simple Interest = $798
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 = $5700 + $798
= $6498
Thus, Amount to be paid = $6498 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 = $5700
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5700 + ($5700 × 2% × 7)
= $5700 + ($5700 ×2/100 × 7)
= $5700 + (5700 × 2 × 7/100)
= $5700 + (11400 × 7/100)
= $5700 + (79800/100)
= $5700 + $798 = $6498
Thus, Amount (A) to be paid = $6498 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 $5700, the simple interest in 1 year
= 2/100 × 5700
= 2 × 5700/100
= 11400/100 = $114
Thus, simple interest for 1 year = $114
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $114 × 7 = $798
Thus, Simple Interest (SI) = $798
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $798
= $6498
Thus, Amount to be paid = $6498 Answer
Similar Questions
(1) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
(2) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(3) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(4) Charles had to pay $4485 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
(6) If Matthew paid $4704 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 8 years.
(8) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?
(9) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 3% simple interest?
(10) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.