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) How much loan did Edward borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8360 to clear it?
(2) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $13200 to clear the loan, then find the time period of the loan.
(3) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 9% simple interest?
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 3% simple interest?
(5) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(6) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(7) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(8) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(9) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(10) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 6% simple interest?