Question:
Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 7 years.
Correct Answer
$7762.5
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 5% × 7
= $5750 ×5/100 × 7
= 5750 × 5 × 7/100
= 28750 × 7/100
= 201250/100
= $2012.5
Thus, Simple Interest = $2012.5
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 = $5750 + $2012.5
= $7762.5
Thus, Amount to be paid = $7762.5 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 = $5750
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5750 + ($5750 × 5% × 7)
= $5750 + ($5750 ×5/100 × 7)
= $5750 + (5750 × 5 × 7/100)
= $5750 + (28750 × 7/100)
= $5750 + (201250/100)
= $5750 + $2012.5 = $7762.5
Thus, Amount (A) to be paid = $7762.5 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 $5750, the simple interest in 1 year
= 5/100 × 5750
= 5 × 5750/100
= 28750/100 = $287.5
Thus, simple interest for 1 year = $287.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $287.5 × 7 = $2012.5
Thus, Simple Interest (SI) = $2012.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $2012.5
= $7762.5
Thus, Amount to be paid = $7762.5 Answer
Similar Questions
(1) Calculate the amount due if Charles borrowed a sum of $3900 at 3% simple interest for 4 years.
(2) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 7 years.
(3) If William paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 6% simple interest?
(5) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(7) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if William borrowed a sum of $3250 at a 6% simple interest?
(9) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 7 years.
(10) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9238 to clear the loan, then find the time period of the loan.