Question:
Find the amount to be paid if David borrowed a sum of $5400 at 8% simple interest for 7 years.
Correct Answer
$8424
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 8% × 7
= $5400 ×8/100 × 7
= 5400 × 8 × 7/100
= 43200 × 7/100
= 302400/100
= $3024
Thus, Simple Interest = $3024
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 = $5400 + $3024
= $8424
Thus, Amount to be paid = $8424 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 = $5400
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5400 + ($5400 × 8% × 7)
= $5400 + ($5400 ×8/100 × 7)
= $5400 + (5400 × 8 × 7/100)
= $5400 + (43200 × 7/100)
= $5400 + (302400/100)
= $5400 + $3024 = $8424
Thus, Amount (A) to be paid = $8424 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 $5400, the simple interest in 1 year
= 8/100 × 5400
= 8 × 5400/100
= 43200/100 = $432
Thus, simple interest for 1 year = $432
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $432 × 7 = $3024
Thus, Simple Interest (SI) = $3024
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $3024
= $8424
Thus, Amount to be paid = $8424 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(3) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 7 years.
(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?
(6) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 6% simple interest for 8 years.
(8) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 8 years.