Question:
Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 7 years.
Correct Answer
$7078.5
Solution And Explanation
Solution
Given,
Principal (P) = $5850
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) = $5850 × 3% × 7
= $5850 ×3/100 × 7
= 5850 × 3 × 7/100
= 17550 × 7/100
= 122850/100
= $1228.5
Thus, Simple Interest = $1228.5
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 = $5850 + $1228.5
= $7078.5
Thus, Amount to be paid = $7078.5 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 = $5850
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5850 + ($5850 × 3% × 7)
= $5850 + ($5850 ×3/100 × 7)
= $5850 + (5850 × 3 × 7/100)
= $5850 + (17550 × 7/100)
= $5850 + (122850/100)
= $5850 + $1228.5 = $7078.5
Thus, Amount (A) to be paid = $7078.5 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 $5850, the simple interest in 1 year
= 3/100 × 5850
= 3 × 5850/100
= 17550/100 = $175.5
Thus, simple interest for 1 year = $175.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $175.5 × 7 = $1228.5
Thus, Simple Interest (SI) = $1228.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5850 + $1228.5
= $7078.5
Thus, Amount to be paid = $7078.5 Answer
Similar Questions
(1) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(3) How much loan did Sharon borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9687.5 to clear it?
(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(5) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
(7) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(8) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(9) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.
(10) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.