Question:
Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 7 years.
Correct Answer
$6464
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 4%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $5050 × 4% × 7
= $5050 ×4/100 × 7
= 5050 × 4 × 7/100
= 20200 × 7/100
= 141400/100
= $1414
Thus, Simple Interest = $1414
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 = $5050 + $1414
= $6464
Thus, Amount to be paid = $6464 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 = $5050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5050 + ($5050 × 4% × 7)
= $5050 + ($5050 ×4/100 × 7)
= $5050 + (5050 × 4 × 7/100)
= $5050 + (20200 × 7/100)
= $5050 + (141400/100)
= $5050 + $1414 = $6464
Thus, Amount (A) to be paid = $6464 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5050, the simple interest in 1 year
= 4/100 × 5050
= 4 × 5050/100
= 20200/100 = $202
Thus, simple interest for 1 year = $202
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $202 × 7 = $1414
Thus, Simple Interest (SI) = $1414
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $1414
= $6464
Thus, Amount to be paid = $6464 Answer
Similar Questions
(1) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 4% simple interest?
(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 7 years.
(3) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 4 years.
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?
(6) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 4 years.
(7) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 3 years.
(9) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8100 to clear it?