Question:
Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 7 years.
Correct Answer
$8892
Solution And Explanation
Solution
Given,
Principal (P) = $5700
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) = $5700 × 8% × 7
= $5700 ×8/100 × 7
= 5700 × 8 × 7/100
= 45600 × 7/100
= 319200/100
= $3192
Thus, Simple Interest = $3192
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 = $5700 + $3192
= $8892
Thus, Amount to be paid = $8892 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 = $5700
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5700 + ($5700 × 8% × 7)
= $5700 + ($5700 ×8/100 × 7)
= $5700 + (5700 × 8 × 7/100)
= $5700 + (45600 × 7/100)
= $5700 + (319200/100)
= $5700 + $3192 = $8892
Thus, Amount (A) to be paid = $8892 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 $5700, the simple interest in 1 year
= 8/100 × 5700
= 8 × 5700/100
= 45600/100 = $456
Thus, simple interest for 1 year = $456
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $456 × 7 = $3192
Thus, Simple Interest (SI) = $3192
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5700 + $3192
= $8892
Thus, Amount to be paid = $8892 Answer
Similar Questions
(1) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(2) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.
(3) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.
(4) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(6) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(10) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.