Question:
Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
Correct Answer
$6528
Solution And Explanation
Solution
Given,
Principal (P) = $5100
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) = $5100 × 4% × 7
= $5100 ×4/100 × 7
= 5100 × 4 × 7/100
= 20400 × 7/100
= 142800/100
= $1428
Thus, Simple Interest = $1428
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 = $5100 + $1428
= $6528
Thus, Amount to be paid = $6528 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 = $5100
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5100 + ($5100 × 4% × 7)
= $5100 + ($5100 ×4/100 × 7)
= $5100 + (5100 × 4 × 7/100)
= $5100 + (20400 × 7/100)
= $5100 + (142800/100)
= $5100 + $1428 = $6528
Thus, Amount (A) to be paid = $6528 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 $5100, the simple interest in 1 year
= 4/100 × 5100
= 4 × 5100/100
= 20400/100 = $204
Thus, simple interest for 1 year = $204
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $204 × 7 = $1428
Thus, Simple Interest (SI) = $1428
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5100 + $1428
= $6528
Thus, Amount to be paid = $6528 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.
(2) 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.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.
(4) In how much time a principal of $3100 will amount to $3565 at a simple interest of 5% per annum?
(5) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.
(8) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(10) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?