Question:
Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 7 years.
Correct Answer
$7360
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 4% × 7
= $5750 ×4/100 × 7
= 5750 × 4 × 7/100
= 23000 × 7/100
= 161000/100
= $1610
Thus, Simple Interest = $1610
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 = $5750 + $1610
= $7360
Thus, Amount to be paid = $7360 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 = $5750
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5750 + ($5750 × 4% × 7)
= $5750 + ($5750 ×4/100 × 7)
= $5750 + (5750 × 4 × 7/100)
= $5750 + (23000 × 7/100)
= $5750 + (161000/100)
= $5750 + $1610 = $7360
Thus, Amount (A) to be paid = $7360 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 $5750, the simple interest in 1 year
= 4/100 × 5750
= 4 × 5750/100
= 23000/100 = $230
Thus, simple interest for 1 year = $230
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $230 × 7 = $1610
Thus, Simple Interest (SI) = $1610
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $1610
= $7360
Thus, Amount to be paid = $7360 Answer
Similar Questions
(1) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 7 years.
(2) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 3 years.
(3) In how much time a principal of $3100 will amount to $3286 at a simple interest of 3% per annum?
(4) Sarah had to pay $4427.5 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 Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
(6) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(7) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.
(8) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.
(10) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.