Question:
Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.
Correct Answer
$6555
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 2% × 7
= $5750 ×2/100 × 7
= 5750 × 2 × 7/100
= 11500 × 7/100
= 80500/100
= $805
Thus, Simple Interest = $805
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 = $5750 + $805
= $6555
Thus, Amount to be paid = $6555 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 = $5750
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5750 + ($5750 × 2% × 7)
= $5750 + ($5750 ×2/100 × 7)
= $5750 + (5750 × 2 × 7/100)
= $5750 + (11500 × 7/100)
= $5750 + (80500/100)
= $5750 + $805 = $6555
Thus, Amount (A) to be paid = $6555 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 $5750, the simple interest in 1 year
= 2/100 × 5750
= 2 × 5750/100
= 11500/100 = $115
Thus, simple interest for 1 year = $115
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $115 × 7 = $805
Thus, Simple Interest (SI) = $805
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $805
= $6555
Thus, Amount to be paid = $6555 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(2) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5576 to clear the loan, then find the time period of the loan.
(4) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 4 years.
(6) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(7) In how much time a principal of $3150 will amount to $3339 at a simple interest of 2% per annum?
(8) If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.