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) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(3) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(4) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(6) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
(7) 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.
(8) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9248 to clear the loan, then find the time period of the loan.
(9) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?
(10) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.