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) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(2) In how much time a principal of $3100 will amount to $3286 at a simple interest of 3% per annum?
(3) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 6% simple interest.
(7) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.
(8) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?
(9) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 7% simple interest?