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) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?
(2) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(3) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(4) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(5) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(7) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?
(8) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 8 years.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?
(10) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 8% simple interest?