Question:
Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 7 years.
Correct Answer
$9204
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 8% × 7
= $5900 ×8/100 × 7
= 5900 × 8 × 7/100
= 47200 × 7/100
= 330400/100
= $3304
Thus, Simple Interest = $3304
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 = $5900 + $3304
= $9204
Thus, Amount to be paid = $9204 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 = $5900
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5900 + ($5900 × 8% × 7)
= $5900 + ($5900 ×8/100 × 7)
= $5900 + (5900 × 8 × 7/100)
= $5900 + (47200 × 7/100)
= $5900 + (330400/100)
= $5900 + $3304 = $9204
Thus, Amount (A) to be paid = $9204 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 $5900, the simple interest in 1 year
= 8/100 × 5900
= 8 × 5900/100
= 47200/100 = $472
Thus, simple interest for 1 year = $472
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $472 × 7 = $3304
Thus, Simple Interest (SI) = $3304
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $3304
= $9204
Thus, Amount to be paid = $9204 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
(2) In how much time a principal of $3100 will amount to $3565 at a simple interest of 5% per annum?
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.
(4) Margaret had to pay $4741.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 7% simple interest.
(7) In how much time a principal of $3100 will amount to $3348 at a simple interest of 2% per annum?
(8) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 7% simple interest?
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.