Question:
Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 7 years.
Correct Answer
$9520
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 10% × 7
= $5600 ×10/100 × 7
= 5600 × 10 × 7/100
= 56000 × 7/100
= 392000/100
= $3920
Thus, Simple Interest = $3920
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 = $5600 + $3920
= $9520
Thus, Amount to be paid = $9520 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 = $5600
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5600 + ($5600 × 10% × 7)
= $5600 + ($5600 ×10/100 × 7)
= $5600 + (5600 × 10 × 7/100)
= $5600 + (56000 × 7/100)
= $5600 + (392000/100)
= $5600 + $3920 = $9520
Thus, Amount (A) to be paid = $9520 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 $5600, the simple interest in 1 year
= 10/100 × 5600
= 10 × 5600/100
= 56000/100 = $560
Thus, simple interest for 1 year = $560
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $560 × 7 = $3920
Thus, Simple Interest (SI) = $3920
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $3920
= $9520
Thus, Amount to be paid = $9520 Answer
Similar Questions
(1) If William borrowed $3500 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(3) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 3 years.
(5) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?
(6) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(7) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(8) If Patricia paid $3402 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.
(10) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.