Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.
Correct Answer
$7616
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 4% × 7
= $5950 ×4/100 × 7
= 5950 × 4 × 7/100
= 23800 × 7/100
= 166600/100
= $1666
Thus, Simple Interest = $1666
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 = $5950 + $1666
= $7616
Thus, Amount to be paid = $7616 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 = $5950
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5950 + ($5950 × 4% × 7)
= $5950 + ($5950 ×4/100 × 7)
= $5950 + (5950 × 4 × 7/100)
= $5950 + (23800 × 7/100)
= $5950 + (166600/100)
= $5950 + $1666 = $7616
Thus, Amount (A) to be paid = $7616 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 $5950, the simple interest in 1 year
= 4/100 × 5950
= 4 × 5950/100
= 23800/100 = $238
Thus, simple interest for 1 year = $238
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $238 × 7 = $1666
Thus, Simple Interest (SI) = $1666
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $1666
= $7616
Thus, Amount to be paid = $7616 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(2) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(4) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
(7) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 10% simple interest?
(8) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6109 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 10% simple interest?
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.