Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 7 years.
Correct Answer
$6783
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 2% × 7
= $5950 ×2/100 × 7
= 5950 × 2 × 7/100
= 11900 × 7/100
= 83300/100
= $833
Thus, Simple Interest = $833
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 = $5950 + $833
= $6783
Thus, Amount to be paid = $6783 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 = $5950
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5950 + ($5950 × 2% × 7)
= $5950 + ($5950 ×2/100 × 7)
= $5950 + (5950 × 2 × 7/100)
= $5950 + (11900 × 7/100)
= $5950 + (83300/100)
= $5950 + $833 = $6783
Thus, Amount (A) to be paid = $6783 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 $5950, the simple interest in 1 year
= 2/100 × 5950
= 2 × 5950/100
= 11900/100 = $119
Thus, simple interest for 1 year = $119
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $119 × 7 = $833
Thus, Simple Interest (SI) = $833
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $833
= $6783
Thus, Amount to be paid = $6783 Answer
Similar Questions
(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9420 to clear it?
(2) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.
(3) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 10% simple interest?
(4) If Sarah borrowed $3850 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.
(6) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7450 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(9) What amount will be due after 2 years if William borrowed a sum of $3250 at a 5% simple interest?
(10) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.