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) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3000 will amount to $3270 at a simple interest of 3% per annum?
(3) If John paid $3456 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
(5) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(7) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6540 to clear it?
(9) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.