Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 7 years.
Correct Answer
$7139
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 3% × 7
= $5900 ×3/100 × 7
= 5900 × 3 × 7/100
= 17700 × 7/100
= 123900/100
= $1239
Thus, Simple Interest = $1239
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 = $5900 + $1239
= $7139
Thus, Amount to be paid = $7139 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 = $5900
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5900 + ($5900 × 3% × 7)
= $5900 + ($5900 ×3/100 × 7)
= $5900 + (5900 × 3 × 7/100)
= $5900 + (17700 × 7/100)
= $5900 + (123900/100)
= $5900 + $1239 = $7139
Thus, Amount (A) to be paid = $7139 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 $5900, the simple interest in 1 year
= 3/100 × 5900
= 3 × 5900/100
= 17700/100 = $177
Thus, simple interest for 1 year = $177
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $177 × 7 = $1239
Thus, Simple Interest (SI) = $1239
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $1239
= $7139
Thus, Amount to be paid = $7139 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(3) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(5) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
(7) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(8) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.
(9) What amount does William have to pay after 6 years if he takes a loan of $3500 at 10% simple interest?
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 3 years.