Question:
Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 7 years.
Correct Answer
$7526
Solution And Explanation
Solution
Given,
Principal (P) = $5300
Rate of Simple Interest (SI) = 6%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $5300 × 6% × 7
= $5300 ×6/100 × 7
= 5300 × 6 × 7/100
= 31800 × 7/100
= 222600/100
= $2226
Thus, Simple Interest = $2226
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 = $5300 + $2226
= $7526
Thus, Amount to be paid = $7526 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 = $5300
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 7 years
Thus, Amount (A)
= $5300 + ($5300 × 6% × 7)
= $5300 + ($5300 ×6/100 × 7)
= $5300 + (5300 × 6 × 7/100)
= $5300 + (31800 × 7/100)
= $5300 + (222600/100)
= $5300 + $2226 = $7526
Thus, Amount (A) to be paid = $7526 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $5300, the simple interest in 1 year
= 6/100 × 5300
= 6 × 5300/100
= 31800/100 = $318
Thus, simple interest for 1 year = $318
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $318 × 7 = $2226
Thus, Simple Interest (SI) = $2226
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $2226
= $7526
Thus, Amount to be paid = $7526 Answer
Similar Questions
(1) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 8 years.
(2) What amount does John have to pay after 5 years if he takes a loan of $3200 at 2% simple interest?
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?
(4) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 7 years.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
(7) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6400 to clear the loan, then find the time period of the loan.
(8) Joseph had to pay $4255 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) How much loan did Richard borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6720 to clear it?
(10) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.