Question:
( 1 of 10 ) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(A) 4 47/50 Or, 247/50
(B) 8 47/50 Or, 447/50
(C) 4 141/50 Or, 341/50
(D) 4 94/50 Or, 294/50
You selected
$5950
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) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8432 to clear the loan, then find the time period of the loan.
(3) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(4) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) If William paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?
(7) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3000 will amount to $3600 at a simple interest of 5% per annum?
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 3% simple interest?
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?