Question:
Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 7 years.
Correct Answer
$6817.5
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 5%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $5050 × 5% × 7
= $5050 ×5/100 × 7
= 5050 × 5 × 7/100
= 25250 × 7/100
= 176750/100
= $1767.5
Thus, Simple Interest = $1767.5
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 = $5050 + $1767.5
= $6817.5
Thus, Amount to be paid = $6817.5 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 = $5050
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5050 + ($5050 × 5% × 7)
= $5050 + ($5050 ×5/100 × 7)
= $5050 + (5050 × 5 × 7/100)
= $5050 + (25250 × 7/100)
= $5050 + (176750/100)
= $5050 + $1767.5 = $6817.5
Thus, Amount (A) to be paid = $6817.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $5050, the simple interest in 1 year
= 5/100 × 5050
= 5 × 5050/100
= 25250/100 = $252.5
Thus, simple interest for 1 year = $252.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $252.5 × 7 = $1767.5
Thus, Simple Interest (SI) = $1767.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $1767.5
= $6817.5
Thus, Amount to be paid = $6817.5 Answer
Similar Questions
(1) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(2) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(5) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 6% simple interest?
(6) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12308 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(8) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 8 years.
(10) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $11020 to clear the loan, then find the time period of the loan.