Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
Correct Answer
$6612
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 2% × 7
= $5800 ×2/100 × 7
= 5800 × 2 × 7/100
= 11600 × 7/100
= 81200/100
= $812
Thus, Simple Interest = $812
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 = $5800 + $812
= $6612
Thus, Amount to be paid = $6612 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 = $5800
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5800 + ($5800 × 2% × 7)
= $5800 + ($5800 ×2/100 × 7)
= $5800 + (5800 × 2 × 7/100)
= $5800 + (11600 × 7/100)
= $5800 + (81200/100)
= $5800 + $812 = $6612
Thus, Amount (A) to be paid = $6612 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 $5800, the simple interest in 1 year
= 2/100 × 5800
= 2 × 5800/100
= 11600/100 = $116
Thus, simple interest for 1 year = $116
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $116 × 7 = $812
Thus, Simple Interest (SI) = $812
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $812
= $6612
Thus, Amount to be paid = $6612 Answer
Similar Questions
(1) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 4 years.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.
(6) 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.
(7) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(8) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if John borrowed a sum of $3200 at 4% simple interest for 4 years.
(10) In how much time a principal of $3200 will amount to $3328 at a simple interest of 2% per annum?