Question:
( 1 of 10 ) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$5200
Correct Answer
$6656
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 4% × 7
= $5200 ×4/100 × 7
= 5200 × 4 × 7/100
= 20800 × 7/100
= 145600/100
= $1456
Thus, Simple Interest = $1456
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 = $5200 + $1456
= $6656
Thus, Amount to be paid = $6656 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 = $5200
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5200 + ($5200 × 4% × 7)
= $5200 + ($5200 ×4/100 × 7)
= $5200 + (5200 × 4 × 7/100)
= $5200 + (20800 × 7/100)
= $5200 + (145600/100)
= $5200 + $1456 = $6656
Thus, Amount (A) to be paid = $6656 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 $5200, the simple interest in 1 year
= 4/100 × 5200
= 4 × 5200/100
= 20800/100 = $208
Thus, simple interest for 1 year = $208
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $208 × 7 = $1456
Thus, Simple Interest (SI) = $1456
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $1456
= $6656
Thus, Amount to be paid = $6656 Answer
Similar Questions
(1) How much loan did Betty borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7187.5 to clear it?
(2) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(3) Jessica had to pay $4087.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 8% simple interest?
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.
(7) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 9% simple interest?
(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(9) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(10) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.