Question:
Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
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) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 4 years.
(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 4 years.
(3) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(4) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(5) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.
(6) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(7) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(8) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.