Question:
Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 7 years.
Correct Answer
$7020
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 5% × 7
= $5200 ×5/100 × 7
= 5200 × 5 × 7/100
= 26000 × 7/100
= 182000/100
= $1820
Thus, Simple Interest = $1820
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 = $5200 + $1820
= $7020
Thus, Amount to be paid = $7020 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 = $5200
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5200 + ($5200 × 5% × 7)
= $5200 + ($5200 ×5/100 × 7)
= $5200 + (5200 × 5 × 7/100)
= $5200 + (26000 × 7/100)
= $5200 + (182000/100)
= $5200 + $1820 = $7020
Thus, Amount (A) to be paid = $7020 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 $5200, the simple interest in 1 year
= 5/100 × 5200
= 5 × 5200/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $260 × 7 = $1820
Thus, Simple Interest (SI) = $1820
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $1820
= $7020
Thus, Amount to be paid = $7020 Answer
Similar Questions
(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 8 years.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(3) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 3 years.
(6) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(7) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 9% simple interest?
(9) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.