Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
Correct Answer
$7199.5
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 3% × 7
= $5950 ×3/100 × 7
= 5950 × 3 × 7/100
= 17850 × 7/100
= 124950/100
= $1249.5
Thus, Simple Interest = $1249.5
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 = $5950 + $1249.5
= $7199.5
Thus, Amount to be paid = $7199.5 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 = $5950
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5950 + ($5950 × 3% × 7)
= $5950 + ($5950 ×3/100 × 7)
= $5950 + (5950 × 3 × 7/100)
= $5950 + (17850 × 7/100)
= $5950 + (124950/100)
= $5950 + $1249.5 = $7199.5
Thus, Amount (A) to be paid = $7199.5 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 $5950, the simple interest in 1 year
= 3/100 × 5950
= 3 × 5950/100
= 17850/100 = $178.5
Thus, simple interest for 1 year = $178.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $178.5 × 7 = $1249.5
Thus, Simple Interest (SI) = $1249.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $1249.5
= $7199.5
Thus, Amount to be paid = $7199.5 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(3) How much loan did Christopher borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6900 to clear it?
(4) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?
(6) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.
(10) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?