Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 4% simple interest for 7 years.
Correct Answer
$7104
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 4% × 7
= $5550 ×4/100 × 7
= 5550 × 4 × 7/100
= 22200 × 7/100
= 155400/100
= $1554
Thus, Simple Interest = $1554
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 = $5550 + $1554
= $7104
Thus, Amount to be paid = $7104 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 = $5550
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5550 + ($5550 × 4% × 7)
= $5550 + ($5550 ×4/100 × 7)
= $5550 + (5550 × 4 × 7/100)
= $5550 + (22200 × 7/100)
= $5550 + (155400/100)
= $5550 + $1554 = $7104
Thus, Amount (A) to be paid = $7104 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 $5550, the simple interest in 1 year
= 4/100 × 5550
= 4 × 5550/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $222 × 7 = $1554
Thus, Simple Interest (SI) = $1554
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $1554
= $7104
Thus, Amount to be paid = $7104 Answer
Similar Questions
(1) If Mary paid $3294 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Christopher had to pay $4600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(4) In how much time a principal of $3050 will amount to $3233 at a simple interest of 2% per annum?
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 7 years.
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 8 years.
(8) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(10) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.