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) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?
(2) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 3 years.
(3) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 3 years.
(5) If Michael paid $3564 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(7) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(10) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.