Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 10% simple interest for 7 years.
Correct Answer
$9095
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 10%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $5350 × 10% × 7
= $5350 ×10/100 × 7
= 5350 × 10 × 7/100
= 53500 × 7/100
= 374500/100
= $3745
Thus, Simple Interest = $3745
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 = $5350 + $3745
= $9095
Thus, Amount to be paid = $9095 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 = $5350
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 10% × 7)
= $5350 + ($5350 ×10/100 × 7)
= $5350 + (5350 × 10 × 7/100)
= $5350 + (53500 × 7/100)
= $5350 + (374500/100)
= $5350 + $3745 = $9095
Thus, Amount (A) to be paid = $9095 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $5350, the simple interest in 1 year
= 10/100 × 5350
= 10 × 5350/100
= 53500/100 = $535
Thus, simple interest for 1 year = $535
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $535 × 7 = $3745
Thus, Simple Interest (SI) = $3745
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $3745
= $9095
Thus, Amount to be paid = $9095 Answer
Similar Questions
(1) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(6) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 4 years.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(10) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?