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) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(3) Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 3 years.
(4) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(7) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(8) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 9% simple interest?
(9) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 8 years.