Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 3% simple interest for 7 years.
Correct Answer
$6776
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 3% × 7
= $5600 ×3/100 × 7
= 5600 × 3 × 7/100
= 16800 × 7/100
= 117600/100
= $1176
Thus, Simple Interest = $1176
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 = $5600 + $1176
= $6776
Thus, Amount to be paid = $6776 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 = $5600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 3% × 7)
= $5600 + ($5600 ×3/100 × 7)
= $5600 + (5600 × 3 × 7/100)
= $5600 + (16800 × 7/100)
= $5600 + (117600/100)
= $5600 + $1176 = $6776
Thus, Amount (A) to be paid = $6776 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 $5600, the simple interest in 1 year
= 3/100 × 5600
= 3 × 5600/100
= 16800/100 = $168
Thus, simple interest for 1 year = $168
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $168 × 7 = $1176
Thus, Simple Interest (SI) = $1176
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1176
= $6776
Thus, Amount to be paid = $6776 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(2) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(5) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(8) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(9) Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.