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) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(3) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 10% simple interest for 4 years.
(5) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 7 years.
(7) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(8) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
(10) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.