Question:
Find the amount to be paid if John borrowed a sum of $5200 at 3% simple interest for 7 years.
Correct Answer
$6292
Solution And Explanation
Solution
Given,
Principal (P) = $5200
Rate of Simple Interest (SI) = 3%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $5200 × 3% × 7
= $5200 ×3/100 × 7
= 5200 × 3 × 7/100
= 15600 × 7/100
= 109200/100
= $1092
Thus, Simple Interest = $1092
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 = $5200 + $1092
= $6292
Thus, Amount to be paid = $6292 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 = $5200
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5200 + ($5200 × 3% × 7)
= $5200 + ($5200 ×3/100 × 7)
= $5200 + (5200 × 3 × 7/100)
= $5200 + (15600 × 7/100)
= $5200 + (109200/100)
= $5200 + $1092 = $6292
Thus, Amount (A) to be paid = $6292 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5200, the simple interest in 1 year
= 3/100 × 5200
= 3 × 5200/100
= 15600/100 = $156
Thus, simple interest for 1 year = $156
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $156 × 7 = $1092
Thus, Simple Interest (SI) = $1092
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $1092
= $6292
Thus, Amount to be paid = $6292 Answer
Similar Questions
(1) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 8 years.
(2) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.
(3) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.
(4) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(5) If Susan borrowed $3650 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 8 years.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
(9) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(10) Donald had to pay $4770 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.