Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 10% simple interest for 7 years.
Correct Answer
$9435
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 10% × 7
= $5550 ×10/100 × 7
= 5550 × 10 × 7/100
= 55500 × 7/100
= 388500/100
= $3885
Thus, Simple Interest = $3885
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 = $5550 + $3885
= $9435
Thus, Amount to be paid = $9435 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 = $5550
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5550 + ($5550 × 10% × 7)
= $5550 + ($5550 ×10/100 × 7)
= $5550 + (5550 × 10 × 7/100)
= $5550 + (55500 × 7/100)
= $5550 + (388500/100)
= $5550 + $3885 = $9435
Thus, Amount (A) to be paid = $9435 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 $5550, the simple interest in 1 year
= 10/100 × 5550
= 10 × 5550/100
= 55500/100 = $555
Thus, simple interest for 1 year = $555
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $555 × 7 = $3885
Thus, Simple Interest (SI) = $3885
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3885
= $9435
Thus, Amount to be paid = $9435 Answer
Similar Questions
(1) If Matthew paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 9% simple interest?
(4) If Donna paid $5820 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(6) In how much time a principal of $3150 will amount to $3528 at a simple interest of 3% per annum?
(7) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
(8) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.
(10) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.