Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.
Correct Answer
$7222.5
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 5% × 7
= $5350 ×5/100 × 7
= 5350 × 5 × 7/100
= 26750 × 7/100
= 187250/100
= $1872.5
Thus, Simple Interest = $1872.5
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 = $5350 + $1872.5
= $7222.5
Thus, Amount to be paid = $7222.5 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 = $5350
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 5% × 7)
= $5350 + ($5350 ×5/100 × 7)
= $5350 + (5350 × 5 × 7/100)
= $5350 + (26750 × 7/100)
= $5350 + (187250/100)
= $5350 + $1872.5 = $7222.5
Thus, Amount (A) to be paid = $7222.5 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 $5350, the simple interest in 1 year
= 5/100 × 5350
= 5 × 5350/100
= 26750/100 = $267.5
Thus, simple interest for 1 year = $267.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $267.5 × 7 = $1872.5
Thus, Simple Interest (SI) = $1872.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1872.5
= $7222.5
Thus, Amount to be paid = $7222.5 Answer
Similar Questions
(1) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(2) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?
(3) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 3 years.
(4) In how much time a principal of $3050 will amount to $3355 at a simple interest of 2% per annum?
(5) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(6) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
(7) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(8) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(10) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.