Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
Correct Answer
$6726
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 2% × 7
= $5900 ×2/100 × 7
= 5900 × 2 × 7/100
= 11800 × 7/100
= 82600/100
= $826
Thus, Simple Interest = $826
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 = $5900 + $826
= $6726
Thus, Amount to be paid = $6726 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 = $5900
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5900 + ($5900 × 2% × 7)
= $5900 + ($5900 ×2/100 × 7)
= $5900 + (5900 × 2 × 7/100)
= $5900 + (11800 × 7/100)
= $5900 + (82600/100)
= $5900 + $826 = $6726
Thus, Amount (A) to be paid = $6726 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 $5900, the simple interest in 1 year
= 2/100 × 5900
= 2 × 5900/100
= 11800/100 = $118
Thus, simple interest for 1 year = $118
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $118 × 7 = $826
Thus, Simple Interest (SI) = $826
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $826
= $6726
Thus, Amount to be paid = $6726 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(2) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.
(4) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(5) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.
(6) What amount does William have to pay after 6 years if he takes a loan of $3500 at 7% simple interest?
(7) If Linda paid $3886 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 8 years.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 3% simple interest for 3 years.
(10) What amount does William have to pay after 6 years if he takes a loan of $3500 at 10% simple interest?