Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 5% simple interest for 7 years.
Correct Answer
$7965
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 5% × 7
= $5900 ×5/100 × 7
= 5900 × 5 × 7/100
= 29500 × 7/100
= 206500/100
= $2065
Thus, Simple Interest = $2065
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 = $5900 + $2065
= $7965
Thus, Amount to be paid = $7965 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 = $5900
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 7 years
Thus, Amount (A)
= $5900 + ($5900 × 5% × 7)
= $5900 + ($5900 ×5/100 × 7)
= $5900 + (5900 × 5 × 7/100)
= $5900 + (29500 × 7/100)
= $5900 + (206500/100)
= $5900 + $2065 = $7965
Thus, Amount (A) to be paid = $7965 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 $5900, the simple interest in 1 year
= 5/100 × 5900
= 5 × 5900/100
= 29500/100 = $295
Thus, simple interest for 1 year = $295
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $295 × 7 = $2065
Thus, Simple Interest (SI) = $2065
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $2065
= $7965
Thus, Amount to be paid = $7965 Answer
Similar Questions
(1) How much loan did Christopher borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6900 to clear it?
(2) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.
(3) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(4) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(5) How much loan did Joshua borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7590 to clear it?
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 3% simple interest for 4 years.
(7) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 4 years.
(8) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(9) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.
(10) If Margaret paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.