Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.
Correct Answer
$9282
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 8% × 7
= $5950 ×8/100 × 7
= 5950 × 8 × 7/100
= 47600 × 7/100
= 333200/100
= $3332
Thus, Simple Interest = $3332
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 = $5950 + $3332
= $9282
Thus, Amount to be paid = $9282 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 = $5950
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5950 + ($5950 × 8% × 7)
= $5950 + ($5950 ×8/100 × 7)
= $5950 + (5950 × 8 × 7/100)
= $5950 + (47600 × 7/100)
= $5950 + (333200/100)
= $5950 + $3332 = $9282
Thus, Amount (A) to be paid = $9282 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 $5950, the simple interest in 1 year
= 8/100 × 5950
= 8 × 5950/100
= 47600/100 = $476
Thus, simple interest for 1 year = $476
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $476 × 7 = $3332
Thus, Simple Interest (SI) = $3332
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $3332
= $9282
Thus, Amount to be paid = $9282 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(2) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 3% simple interest?
(3) How much loan did Susan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7062.5 to clear it?
(4) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(5) In how much time a principal of $3000 will amount to $3270 at a simple interest of 3% per annum?
(6) If Barbara paid $3834 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.
(8) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.