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 William borrowed a sum of $5500 at 10% simple interest for 8 years.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 6% simple interest for 3 years.
(3) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?
(4) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(5) How much loan did Andrew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8160 to clear it?
(6) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
(7) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(8) If Jessica paid $4350 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(10) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.