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) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(2) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.
(3) How much loan did Lisa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6957.5 to clear it?
(4) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(5) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(8) In how much time a principal of $3100 will amount to $3348 at a simple interest of 4% per annum?
(9) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 5% simple interest.
(10) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.