Question:
Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.
Correct Answer
$6912
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 4% × 7
= $5400 ×4/100 × 7
= 5400 × 4 × 7/100
= 21600 × 7/100
= 151200/100
= $1512
Thus, Simple Interest = $1512
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 = $5400 + $1512
= $6912
Thus, Amount to be paid = $6912 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 = $5400
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5400 + ($5400 × 4% × 7)
= $5400 + ($5400 ×4/100 × 7)
= $5400 + (5400 × 4 × 7/100)
= $5400 + (21600 × 7/100)
= $5400 + (151200/100)
= $5400 + $1512 = $6912
Thus, Amount (A) to be paid = $6912 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 $5400, the simple interest in 1 year
= 4/100 × 5400
= 4 × 5400/100
= 21600/100 = $216
Thus, simple interest for 1 year = $216
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $216 × 7 = $1512
Thus, Simple Interest (SI) = $1512
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $1512
= $6912
Thus, Amount to be paid = $6912 Answer
Similar Questions
(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 8 years.
(2) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
(3) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(4) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.
(5) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.
(8) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 5% simple interest?
(10) If Donald paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.