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 Jennifer borrowed a sum of $3250 at 9% simple interest for 4 years.
(2) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(4) In how much time a principal of $3200 will amount to $3584 at a simple interest of 4% per annum?
(5) If Patricia borrowed $3150 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(6) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(10) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5440 to clear the loan, then find the time period of the loan.