Question:
Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 7 years.
Correct Answer
$6669
Solution And Explanation
Solution
Given,
Principal (P) = $5850
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) = $5850 × 2% × 7
= $5850 ×2/100 × 7
= 5850 × 2 × 7/100
= 11700 × 7/100
= 81900/100
= $819
Thus, Simple Interest = $819
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 = $5850 + $819
= $6669
Thus, Amount to be paid = $6669 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 = $5850
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5850 + ($5850 × 2% × 7)
= $5850 + ($5850 ×2/100 × 7)
= $5850 + (5850 × 2 × 7/100)
= $5850 + (11700 × 7/100)
= $5850 + (81900/100)
= $5850 + $819 = $6669
Thus, Amount (A) to be paid = $6669 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 $5850, the simple interest in 1 year
= 2/100 × 5850
= 2 × 5850/100
= 11700/100 = $117
Thus, simple interest for 1 year = $117
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $117 × 7 = $819
Thus, Simple Interest (SI) = $819
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5850 + $819
= $6669
Thus, Amount to be paid = $6669 Answer
Similar Questions
(1) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?
(2) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(3) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?
(4) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 3 years.
(6) If Paul paid $5076 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.
(9) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $9460 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.