Question:
Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
Correct Answer
$9095
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 7%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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) = $5350 × 7% × 10
= $5350 ×7/100 × 10
= 5350 × 7 × 10/100
= 37450 × 10/100
= 374500/100
= $3745
Thus, Simple Interest = $3745
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 = $5350 + $3745
= $9095
Thus, Amount to be paid = $9095 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 = $5350
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5350 + ($5350 × 7% × 10)
= $5350 + ($5350 ×7/100 × 10)
= $5350 + (5350 × 7 × 10/100)
= $5350 + (37450 × 10/100)
= $5350 + (374500/100)
= $5350 + $3745 = $9095
Thus, Amount (A) to be paid = $9095 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5350, the simple interest in 1 year
= 7/100 × 5350
= 7 × 5350/100
= 37450/100 = $374.5
Thus, simple interest for 1 year = $374.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $374.5 × 10 = $3745
Thus, Simple Interest (SI) = $3745
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $3745
= $9095
Thus, Amount to be paid = $9095 Answer
Similar Questions
(1) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 7 years.
(2) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 3 years.
(5) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?
(6) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(7) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(10) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.