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) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5964 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(3) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $13400 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3100 will amount to $3379 at a simple interest of 3% per annum?
(5) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(7) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(9) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(10) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.