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) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.
(2) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?
(4) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.
(6) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(7) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
(8) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(9) What amount will be due after 2 years if William borrowed a sum of $3250 at a 7% simple interest?
(10) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.