Question:
Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
Correct Answer
$10115
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 10% × 7
= $5950 ×10/100 × 7
= 5950 × 10 × 7/100
= 59500 × 7/100
= 416500/100
= $4165
Thus, Simple Interest = $4165
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 = $5950 + $4165
= $10115
Thus, Amount to be paid = $10115 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 = $5950
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5950 + ($5950 × 10% × 7)
= $5950 + ($5950 ×10/100 × 7)
= $5950 + (5950 × 10 × 7/100)
= $5950 + (59500 × 7/100)
= $5950 + (416500/100)
= $5950 + $4165 = $10115
Thus, Amount (A) to be paid = $10115 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 $5950, the simple interest in 1 year
= 10/100 × 5950
= 10 × 5950/100
= 59500/100 = $595
Thus, simple interest for 1 year = $595
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $595 × 7 = $4165
Thus, Simple Interest (SI) = $4165
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $4165
= $10115
Thus, Amount to be paid = $10115 Answer
Similar Questions
(1) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 7 years.
(2) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.
(3) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(5) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 3% simple interest?
(6) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $10000 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
(8) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?
(9) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 4 years.
(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?