Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.
Correct Answer
$8346
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 8%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $5350 × 8% × 7
= $5350 ×8/100 × 7
= 5350 × 8 × 7/100
= 42800 × 7/100
= 299600/100
= $2996
Thus, Simple Interest = $2996
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 = $5350 + $2996
= $8346
Thus, Amount to be paid = $8346 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 = $5350
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 8% × 7)
= $5350 + ($5350 ×8/100 × 7)
= $5350 + (5350 × 8 × 7/100)
= $5350 + (42800 × 7/100)
= $5350 + (299600/100)
= $5350 + $2996 = $8346
Thus, Amount (A) to be paid = $8346 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $5350, the simple interest in 1 year
= 8/100 × 5350
= 8 × 5350/100
= 42800/100 = $428
Thus, simple interest for 1 year = $428
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $428 × 7 = $2996
Thus, Simple Interest (SI) = $2996
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $2996
= $8346
Thus, Amount to be paid = $8346 Answer
Similar Questions
(1) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.
(3) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 3 years.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(6) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.
(7) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.