Question:
Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.
Correct Answer
$7290
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 5% × 7
= $5400 ×5/100 × 7
= 5400 × 5 × 7/100
= 27000 × 7/100
= 189000/100
= $1890
Thus, Simple Interest = $1890
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 = $5400 + $1890
= $7290
Thus, Amount to be paid = $7290 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 = $5400
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5400 + ($5400 × 5% × 7)
= $5400 + ($5400 ×5/100 × 7)
= $5400 + (5400 × 5 × 7/100)
= $5400 + (27000 × 7/100)
= $5400 + (189000/100)
= $5400 + $1890 = $7290
Thus, Amount (A) to be paid = $7290 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 $5400, the simple interest in 1 year
= 5/100 × 5400
= 5 × 5400/100
= 27000/100 = $270
Thus, simple interest for 1 year = $270
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $270 × 7 = $1890
Thus, Simple Interest (SI) = $1890
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $1890
= $7290
Thus, Amount to be paid = $7290 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
(3) How much loan did Melissa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9187.5 to clear it?
(4) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(5) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 8 years.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 7% simple interest for 8 years.
(10) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.