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 9 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 10% simple interest?
(3) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(5) If Kenneth paid $6000 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(7) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(10) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.