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) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10360 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 4% simple interest?
(3) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 8 years.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(5) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7980 to clear it?
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 7 years.
(7) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 6% simple interest?
(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 7 years.
(10) Find the amount to be paid if James borrowed a sum of $5000 at 2% simple interest for 8 years.