Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 7 years.
Correct Answer
$7168
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 4% × 7
= $5600 ×4/100 × 7
= 5600 × 4 × 7/100
= 22400 × 7/100
= 156800/100
= $1568
Thus, Simple Interest = $1568
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 = $5600 + $1568
= $7168
Thus, Amount to be paid = $7168 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 = $5600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 4% × 7)
= $5600 + ($5600 ×4/100 × 7)
= $5600 + (5600 × 4 × 7/100)
= $5600 + (22400 × 7/100)
= $5600 + (156800/100)
= $5600 + $1568 = $7168
Thus, Amount (A) to be paid = $7168 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 $5600, the simple interest in 1 year
= 4/100 × 5600
= 4 × 5600/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $224 × 7 = $1568
Thus, Simple Interest (SI) = $1568
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1568
= $7168
Thus, Amount to be paid = $7168 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(3) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 7 years.
(4) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(8) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11316 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(10) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 8% simple interest?