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) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 4 years.
(3) How much loan did Edward borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9500 to clear it?
(4) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(5) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(10) If Christopher paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.