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) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 3 years.
(2) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(3) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 4 years.
(5) Andrew had to pay $5376 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) David had to pay $3808 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?
(9) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 4% simple interest?