Question:
Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.
Correct Answer
$9860
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 10% × 7
= $5800 ×10/100 × 7
= 5800 × 10 × 7/100
= 58000 × 7/100
= 406000/100
= $4060
Thus, Simple Interest = $4060
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 = $5800 + $4060
= $9860
Thus, Amount to be paid = $9860 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 = $5800
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5800 + ($5800 × 10% × 7)
= $5800 + ($5800 ×10/100 × 7)
= $5800 + (5800 × 10 × 7/100)
= $5800 + (58000 × 7/100)
= $5800 + (406000/100)
= $5800 + $4060 = $9860
Thus, Amount (A) to be paid = $9860 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 $5800, the simple interest in 1 year
= 10/100 × 5800
= 10 × 5800/100
= 58000/100 = $580
Thus, simple interest for 1 year = $580
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $580 × 7 = $4060
Thus, Simple Interest (SI) = $4060
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $4060
= $9860
Thus, Amount to be paid = $9860 Answer
Similar Questions
(1) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 3 years.
(3) What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 9% simple interest?
(5) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(6) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5440 to clear the loan, then find the time period of the loan.
(7) Mark had to pay $5060 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 8 years.
(9) How much loan did Carol borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7755 to clear it?
(10) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 6% simple interest?