Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
Correct Answer
$8344
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 7% × 7
= $5600 ×7/100 × 7
= 5600 × 7 × 7/100
= 39200 × 7/100
= 274400/100
= $2744
Thus, Simple Interest = $2744
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 = $5600 + $2744
= $8344
Thus, Amount to be paid = $8344 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 = $5600
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 7% × 7)
= $5600 + ($5600 ×7/100 × 7)
= $5600 + (5600 × 7 × 7/100)
= $5600 + (39200 × 7/100)
= $5600 + (274400/100)
= $5600 + $2744 = $8344
Thus, Amount (A) to be paid = $8344 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 $5600, the simple interest in 1 year
= 7/100 × 5600
= 7 × 5600/100
= 39200/100 = $392
Thus, simple interest for 1 year = $392
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $392 × 7 = $2744
Thus, Simple Interest (SI) = $2744
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $2744
= $8344
Thus, Amount to be paid = $8344 Answer
Similar Questions
(1) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 6% simple interest?
(3) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8736 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(5) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(6) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?
(7) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 7% simple interest?
(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 9% simple interest?
(9) How much loan did Ashley borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7532.5 to clear it?
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.