Question:
Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 7 years.
Correct Answer
$7668
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 6% × 7
= $5400 ×6/100 × 7
= 5400 × 6 × 7/100
= 32400 × 7/100
= 226800/100
= $2268
Thus, Simple Interest = $2268
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 = $5400 + $2268
= $7668
Thus, Amount to be paid = $7668 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 = $5400
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 7 years
Thus, Amount (A)
= $5400 + ($5400 × 6% × 7)
= $5400 + ($5400 ×6/100 × 7)
= $5400 + (5400 × 6 × 7/100)
= $5400 + (32400 × 7/100)
= $5400 + (226800/100)
= $5400 + $2268 = $7668
Thus, Amount (A) to be paid = $7668 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 $5400, the simple interest in 1 year
= 6/100 × 5400
= 6 × 5400/100
= 32400/100 = $324
Thus, simple interest for 1 year = $324
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $324 × 7 = $2268
Thus, Simple Interest (SI) = $2268
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $2268
= $7668
Thus, Amount to be paid = $7668 Answer
Similar Questions
(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?
(2) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(4) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.
(7) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(8) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $13400 to clear the loan, then find the time period of the loan.
(10) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.