Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.
Correct Answer
$8236
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 6% × 7
= $5800 ×6/100 × 7
= 5800 × 6 × 7/100
= 34800 × 7/100
= 243600/100
= $2436
Thus, Simple Interest = $2436
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 = $5800 + $2436
= $8236
Thus, Amount to be paid = $8236 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 = $5800
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 7 years
Thus, Amount (A)
= $5800 + ($5800 × 6% × 7)
= $5800 + ($5800 ×6/100 × 7)
= $5800 + (5800 × 6 × 7/100)
= $5800 + (34800 × 7/100)
= $5800 + (243600/100)
= $5800 + $2436 = $8236
Thus, Amount (A) to be paid = $8236 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 $5800, the simple interest in 1 year
= 6/100 × 5800
= 6 × 5800/100
= 34800/100 = $348
Thus, simple interest for 1 year = $348
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $348 × 7 = $2436
Thus, Simple Interest (SI) = $2436
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $2436
= $8236
Thus, Amount to be paid = $8236 Answer
Similar Questions
(1) How much loan did Jacob borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9600 to clear it?
(2) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 8 years.
(3) How much loan did Timothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8880 to clear it?
(4) What amount does James have to pay after 6 years if he takes a loan of $3000 at 10% simple interest?
(5) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 4% simple interest?
(6) In how much time a principal of $3050 will amount to $3233 at a simple interest of 2% per annum?
(7) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 4% simple interest for 3 years.
(9) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?