Question:
Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
Correct Answer
$6836.5
Solution And Explanation
Solution
Given,
Principal (P) = $5650
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) = $5650 × 3% × 7
= $5650 ×3/100 × 7
= 5650 × 3 × 7/100
= 16950 × 7/100
= 118650/100
= $1186.5
Thus, Simple Interest = $1186.5
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 = $5650 + $1186.5
= $6836.5
Thus, Amount to be paid = $6836.5 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 = $5650
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5650 + ($5650 × 3% × 7)
= $5650 + ($5650 ×3/100 × 7)
= $5650 + (5650 × 3 × 7/100)
= $5650 + (16950 × 7/100)
= $5650 + (118650/100)
= $5650 + $1186.5 = $6836.5
Thus, Amount (A) to be paid = $6836.5 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 $5650, the simple interest in 1 year
= 3/100 × 5650
= 3 × 5650/100
= 16950/100 = $169.5
Thus, simple interest for 1 year = $169.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $169.5 × 7 = $1186.5
Thus, Simple Interest (SI) = $1186.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5650 + $1186.5
= $6836.5
Thus, Amount to be paid = $6836.5 Answer
Similar Questions
(1) If Joshua paid $5880 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(5) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.
(8) In how much time a principal of $3050 will amount to $3416 at a simple interest of 4% per annum?
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 5% simple interest?
(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.