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) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(3) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?
(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(6) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(7) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 5% simple interest?
(8) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?
(9) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(10) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9310 to clear the loan, then find the time period of the loan.