Question:
Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 7 years.
Correct Answer
$8231.5
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 9%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $5050 × 9% × 7
= $5050 ×9/100 × 7
= 5050 × 9 × 7/100
= 45450 × 7/100
= 318150/100
= $3181.5
Thus, Simple Interest = $3181.5
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 = $5050 + $3181.5
= $8231.5
Thus, Amount to be paid = $8231.5 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 = $5050
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5050 + ($5050 × 9% × 7)
= $5050 + ($5050 ×9/100 × 7)
= $5050 + (5050 × 9 × 7/100)
= $5050 + (45450 × 7/100)
= $5050 + (318150/100)
= $5050 + $3181.5 = $8231.5
Thus, Amount (A) to be paid = $8231.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $5050, the simple interest in 1 year
= 9/100 × 5050
= 9 × 5050/100
= 45450/100 = $454.5
Thus, simple interest for 1 year = $454.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $454.5 × 7 = $3181.5
Thus, Simple Interest (SI) = $3181.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $3181.5
= $8231.5
Thus, Amount to be paid = $8231.5 Answer
Similar Questions
(1) If William paid $3920 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 8 years.
(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(5) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 7 years.
(7) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 2% simple interest?
(8) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?
(9) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 6% simple interest?
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 9% simple interest?