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) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
(2) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 10% simple interest?
(3) Kenneth had to pay $5450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) In how much time a principal of $3050 will amount to $3294 at a simple interest of 2% per annum?
(6) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 3% simple interest?
(7) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9248 to clear the loan, then find the time period of the loan.
(8) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.