Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 7 years.
Correct Answer
$7424
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 4% × 7
= $5800 ×4/100 × 7
= 5800 × 4 × 7/100
= 23200 × 7/100
= 162400/100
= $1624
Thus, Simple Interest = $1624
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 = $5800 + $1624
= $7424
Thus, Amount to be paid = $7424 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 = $5800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5800 + ($5800 × 4% × 7)
= $5800 + ($5800 ×4/100 × 7)
= $5800 + (5800 × 4 × 7/100)
= $5800 + (23200 × 7/100)
= $5800 + (162400/100)
= $5800 + $1624 = $7424
Thus, Amount (A) to be paid = $7424 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 $5800, the simple interest in 1 year
= 4/100 × 5800
= 4 × 5800/100
= 23200/100 = $232
Thus, simple interest for 1 year = $232
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $232 × 7 = $1624
Thus, Simple Interest (SI) = $1624
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $1624
= $7424
Thus, Amount to be paid = $7424 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.
(2) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10132 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.
(4) Donald had to pay $5040 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(6) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Mary had to pay $3416 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 7 years.
(10) If Linda paid $3752 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.