Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.
Correct Answer
$7296
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 4% × 7
= $5700 ×4/100 × 7
= 5700 × 4 × 7/100
= 22800 × 7/100
= 159600/100
= $1596
Thus, Simple Interest = $1596
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 = $5700 + $1596
= $7296
Thus, Amount to be paid = $7296 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 = $5700
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5700 + ($5700 × 4% × 7)
= $5700 + ($5700 ×4/100 × 7)
= $5700 + (5700 × 4 × 7/100)
= $5700 + (22800 × 7/100)
= $5700 + (159600/100)
= $5700 + $1596 = $7296
Thus, Amount (A) to be paid = $7296 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 $5700, the simple interest in 1 year
= 4/100 × 5700
= 4 × 5700/100
= 22800/100 = $228
Thus, simple interest for 1 year = $228
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $228 × 7 = $1596
Thus, Simple Interest (SI) = $1596
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $1596
= $7296
Thus, Amount to be paid = $7296 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(2) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7647.5 to clear it?
(3) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8688 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 4 years.
(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(6) In how much time a principal of $3100 will amount to $3379 at a simple interest of 3% per annum?
(7) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.
(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(10) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.