Question:
Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
Correct Answer
$9265
Solution And Explanation
Solution
Given,
Principal (P) = $5450
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) = $5450 × 10% × 7
= $5450 ×10/100 × 7
= 5450 × 10 × 7/100
= 54500 × 7/100
= 381500/100
= $3815
Thus, Simple Interest = $3815
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 = $5450 + $3815
= $9265
Thus, Amount to be paid = $9265 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 = $5450
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5450 + ($5450 × 10% × 7)
= $5450 + ($5450 ×10/100 × 7)
= $5450 + (5450 × 10 × 7/100)
= $5450 + (54500 × 7/100)
= $5450 + (381500/100)
= $5450 + $3815 = $9265
Thus, Amount (A) to be paid = $9265 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 $5450, the simple interest in 1 year
= 10/100 × 5450
= 10 × 5450/100
= 54500/100 = $545
Thus, simple interest for 1 year = $545
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $545 × 7 = $3815
Thus, Simple Interest (SI) = $3815
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5450 + $3815
= $9265
Thus, Amount to be paid = $9265 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(2) If James paid $3600 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.
(5) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(6) How much loan did Sarah borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6727.5 to clear it?
(7) Jessica had to pay $4200 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 3 years.
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.