Question:
Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 7 years.
Correct Answer
$9180
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 10% × 7
= $5400 ×10/100 × 7
= 5400 × 10 × 7/100
= 54000 × 7/100
= 378000/100
= $3780
Thus, Simple Interest = $3780
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 = $5400 + $3780
= $9180
Thus, Amount to be paid = $9180 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 = $5400
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5400 + ($5400 × 10% × 7)
= $5400 + ($5400 ×10/100 × 7)
= $5400 + (5400 × 10 × 7/100)
= $5400 + (54000 × 7/100)
= $5400 + (378000/100)
= $5400 + $3780 = $9180
Thus, Amount (A) to be paid = $9180 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 $5400, the simple interest in 1 year
= 10/100 × 5400
= 10 × 5400/100
= 54000/100 = $540
Thus, simple interest for 1 year = $540
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $540 × 7 = $3780
Thus, Simple Interest (SI) = $3780
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $3780
= $9180
Thus, Amount to be paid = $9180 Answer
Similar Questions
(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 5% simple interest?
(2) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(4) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8046 to clear the loan, then find the time period of the loan.
(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(6) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?
(7) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 7 years.
(9) How much loan did Jason borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9625 to clear it?
(10) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.