Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 7 years.
Correct Answer
$8449
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 6% × 7
= $5950 ×6/100 × 7
= 5950 × 6 × 7/100
= 35700 × 7/100
= 249900/100
= $2499
Thus, Simple Interest = $2499
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 = $5950 + $2499
= $8449
Thus, Amount to be paid = $8449 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 = $5950
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 7 years
Thus, Amount (A)
= $5950 + ($5950 × 6% × 7)
= $5950 + ($5950 ×6/100 × 7)
= $5950 + (5950 × 6 × 7/100)
= $5950 + (35700 × 7/100)
= $5950 + (249900/100)
= $5950 + $2499 = $8449
Thus, Amount (A) to be paid = $8449 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 $5950, the simple interest in 1 year
= 6/100 × 5950
= 6 × 5950/100
= 35700/100 = $357
Thus, simple interest for 1 year = $357
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $357 × 7 = $2499
Thus, Simple Interest (SI) = $2499
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $2499
= $8449
Thus, Amount to be paid = $8449 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.
(2) If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 4 years.
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 4% simple interest?
(5) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(6) Karen had to pay $4305.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) What amount does John have to pay after 5 years if he takes a loan of $3200 at 2% simple interest?
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 9% simple interest?
(9) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 2% simple interest?
(10) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.