Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
Correct Answer
$7018
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 3% × 7
= $5800 ×3/100 × 7
= 5800 × 3 × 7/100
= 17400 × 7/100
= 121800/100
= $1218
Thus, Simple Interest = $1218
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 = $5800 + $1218
= $7018
Thus, Amount to be paid = $7018 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 = $5800
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5800 + ($5800 × 3% × 7)
= $5800 + ($5800 ×3/100 × 7)
= $5800 + (5800 × 3 × 7/100)
= $5800 + (17400 × 7/100)
= $5800 + (121800/100)
= $5800 + $1218 = $7018
Thus, Amount (A) to be paid = $7018 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 $5800, the simple interest in 1 year
= 3/100 × 5800
= 3 × 5800/100
= 17400/100 = $174
Thus, simple interest for 1 year = $174
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $174 × 7 = $1218
Thus, Simple Interest (SI) = $1218
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $1218
= $7018
Thus, Amount to be paid = $7018 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 4 years.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 8 years.
(4) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 7 years.
(8) 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.
(9) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?