Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
Correct Answer
$8269.5
Solution And Explanation
Solution
Given,
Principal (P) = $5550
Rate of Simple Interest (SI) = 7%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 7
= $5550 ×7/100 × 7
= 5550 × 7 × 7/100
= 38850 × 7/100
= 271950/100
= $2719.5
Thus, Simple Interest = $2719.5
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 + $2719.5
= $8269.5
Thus, Amount to be paid = $8269.5 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) = 7%
And, Time (t) = 7 years
Thus, Amount (A)
= $5550 + ($5550 × 7% × 7)
= $5550 + ($5550 ×7/100 × 7)
= $5550 + (5550 × 7 × 7/100)
= $5550 + (38850 × 7/100)
= $5550 + (271950/100)
= $5550 + $2719.5 = $8269.5
Thus, Amount (A) to be paid = $8269.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5550, the simple interest in 1 year
= 7/100 × 5550
= 7 × 5550/100
= 38850/100 = $388.5
Thus, simple interest for 1 year = $388.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $388.5 × 7 = $2719.5
Thus, Simple Interest (SI) = $2719.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $2719.5
= $8269.5
Thus, Amount to be paid = $8269.5 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(3) Donald had to pay $4905 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(5) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 3 years.
(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) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(9) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.