Question:
Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 7 years.
Correct Answer
$6413
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 3% × 7
= $5300 ×3/100 × 7
= 5300 × 3 × 7/100
= 15900 × 7/100
= 111300/100
= $1113
Thus, Simple Interest = $1113
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 = $5300 + $1113
= $6413
Thus, Amount to be paid = $6413 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 = $5300
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5300 + ($5300 × 3% × 7)
= $5300 + ($5300 ×3/100 × 7)
= $5300 + (5300 × 3 × 7/100)
= $5300 + (15900 × 7/100)
= $5300 + (111300/100)
= $5300 + $1113 = $6413
Thus, Amount (A) to be paid = $6413 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 $5300, the simple interest in 1 year
= 3/100 × 5300
= 3 × 5300/100
= 15900/100 = $159
Thus, simple interest for 1 year = $159
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $159 × 7 = $1113
Thus, Simple Interest (SI) = $1113
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1113
= $6413
Thus, Amount to be paid = $6413 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(2) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(3) If Steven paid $5520 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(5) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(6) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.
(8) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(9) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(10) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.