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) How much loan did Edward borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9120 to clear it?
(2) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 5% simple interest?
(3) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.
(6) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(7) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(9) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 7 years.