Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 7 years.
Correct Answer
$9128
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 9% × 7
= $5600 ×9/100 × 7
= 5600 × 9 × 7/100
= 50400 × 7/100
= 352800/100
= $3528
Thus, Simple Interest = $3528
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 = $5600 + $3528
= $9128
Thus, Amount to be paid = $9128 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 = $5600
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 9% × 7)
= $5600 + ($5600 ×9/100 × 7)
= $5600 + (5600 × 9 × 7/100)
= $5600 + (50400 × 7/100)
= $5600 + (352800/100)
= $5600 + $3528 = $9128
Thus, Amount (A) to be paid = $9128 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 $5600, the simple interest in 1 year
= 9/100 × 5600
= 9 × 5600/100
= 50400/100 = $504
Thus, simple interest for 1 year = $504
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $504 × 7 = $3528
Thus, Simple Interest (SI) = $3528
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $3528
= $9128
Thus, Amount to be paid = $9128 Answer
Similar Questions
(1) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(2) If Linda borrowed $3350 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?
(4) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(5) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 4% simple interest?
(7) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 3 years.
(9) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 6% simple interest?
(10) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.