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 Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(3) Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 3 years.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(5) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(6) Sarah had to pay $4427.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(8) If Barbara paid $4260 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 3 years.
(10) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.