Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 7 years.
Correct Answer
$7560
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 5% × 7
= $5600 ×5/100 × 7
= 5600 × 5 × 7/100
= 28000 × 7/100
= 196000/100
= $1960
Thus, Simple Interest = $1960
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 = $5600 + $1960
= $7560
Thus, Amount to be paid = $7560 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 = $5600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 5% × 7)
= $5600 + ($5600 ×5/100 × 7)
= $5600 + (5600 × 5 × 7/100)
= $5600 + (28000 × 7/100)
= $5600 + (196000/100)
= $5600 + $1960 = $7560
Thus, Amount (A) to be paid = $7560 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 $5600, the simple interest in 1 year
= 5/100 × 5600
= 5 × 5600/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $280 × 7 = $1960
Thus, Simple Interest (SI) = $1960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1960
= $7560
Thus, Amount to be paid = $7560 Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 8 years.
(2) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(3) What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?
(4) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(7) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $6528 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(9) Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 7 years.
(10) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.