Question:
Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 7 years.
Correct Answer
$6957.5
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 3% × 7
= $5750 ×3/100 × 7
= 5750 × 3 × 7/100
= 17250 × 7/100
= 120750/100
= $1207.5
Thus, Simple Interest = $1207.5
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 = $5750 + $1207.5
= $6957.5
Thus, Amount to be paid = $6957.5 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 = $5750
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5750 + ($5750 × 3% × 7)
= $5750 + ($5750 ×3/100 × 7)
= $5750 + (5750 × 3 × 7/100)
= $5750 + (17250 × 7/100)
= $5750 + (120750/100)
= $5750 + $1207.5 = $6957.5
Thus, Amount (A) to be paid = $6957.5 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 $5750, the simple interest in 1 year
= 3/100 × 5750
= 3 × 5750/100
= 17250/100 = $172.5
Thus, simple interest for 1 year = $172.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $172.5 × 7 = $1207.5
Thus, Simple Interest (SI) = $1207.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $1207.5
= $6957.5
Thus, Amount to be paid = $6957.5 Answer
Similar Questions
(1) Find the amount to be paid if Thomas borrowed a sum of $5800 at 9% simple interest for 8 years.
(2) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(3) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(6) In how much time a principal of $3200 will amount to $3680 at a simple interest of 5% per annum?
(7) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7700 to clear it?
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(9) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(10) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?