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) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 8 years.
(3) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 2% simple interest?
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(6) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
(8) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.