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) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?
(2) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(3) Patricia had to pay $3433.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7240 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 3 years.
(6) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.
(7) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 8 years.
(8) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 3 years.
(9) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 4 years.
(10) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.