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) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.
(3) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3000 will amount to $3480 at a simple interest of 4% per annum?
(5) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 4 years.
(6) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(8) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.
(9) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 3% simple interest?
(10) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.