Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 7 years.
Correct Answer
$7881
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 6% × 7
= $5550 ×6/100 × 7
= 5550 × 6 × 7/100
= 33300 × 7/100
= 233100/100
= $2331
Thus, Simple Interest = $2331
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 = $5550 + $2331
= $7881
Thus, Amount to be paid = $7881 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 = $5550
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 7 years
Thus, Amount (A)
= $5550 + ($5550 × 6% × 7)
= $5550 + ($5550 ×6/100 × 7)
= $5550 + (5550 × 6 × 7/100)
= $5550 + (33300 × 7/100)
= $5550 + (233100/100)
= $5550 + $2331 = $7881
Thus, Amount (A) to be paid = $7881 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 $5550, the simple interest in 1 year
= 6/100 × 5550
= 6 × 5550/100
= 33300/100 = $333
Thus, simple interest for 1 year = $333
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $333 × 7 = $2331
Thus, Simple Interest (SI) = $2331
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $2331
= $7881
Thus, Amount to be paid = $7881 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(2) If Mark paid $4928 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(4) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 5% simple interest?
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 7% simple interest for 4 years.
(8) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(9) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 7% simple interest.