Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
Correct Answer
$7552
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 4% × 7
= $5900 ×4/100 × 7
= 5900 × 4 × 7/100
= 23600 × 7/100
= 165200/100
= $1652
Thus, Simple Interest = $1652
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 = $5900 + $1652
= $7552
Thus, Amount to be paid = $7552 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 = $5900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5900 + ($5900 × 4% × 7)
= $5900 + ($5900 ×4/100 × 7)
= $5900 + (5900 × 4 × 7/100)
= $5900 + (23600 × 7/100)
= $5900 + (165200/100)
= $5900 + $1652 = $7552
Thus, Amount (A) to be paid = $7552 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 $5900, the simple interest in 1 year
= 4/100 × 5900
= 4 × 5900/100
= 23600/100 = $236
Thus, simple interest for 1 year = $236
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $236 × 7 = $1652
Thus, Simple Interest (SI) = $1652
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $1652
= $7552
Thus, Amount to be paid = $7552 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(2) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.
(4) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(6) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(7) If Susan paid $4380 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(9) How much loan did Amanda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8937.5 to clear it?
(10) Lisa had to pay $4657.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.