Question:
Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
Correct Answer
$9265
Solution And Explanation
Solution
Given,
Principal (P) = $5450
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) = $5450 × 7% × 10
= $5450 ×7/100 × 10
= 5450 × 7 × 10/100
= 38150 × 10/100
= 381500/100
= $3815
Thus, Simple Interest = $3815
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 = $5450 + $3815
= $9265
Thus, Amount to be paid = $9265 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 = $5450
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5450 + ($5450 × 7% × 10)
= $5450 + ($5450 ×7/100 × 10)
= $5450 + (5450 × 7 × 10/100)
= $5450 + (38150 × 10/100)
= $5450 + (381500/100)
= $5450 + $3815 = $9265
Thus, Amount (A) to be paid = $9265 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 $5450, the simple interest in 1 year
= 7/100 × 5450
= 7 × 5450/100
= 38150/100 = $381.5
Thus, simple interest for 1 year = $381.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $381.5 × 10 = $3815
Thus, Simple Interest (SI) = $3815
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5450 + $3815
= $9265
Thus, Amount to be paid = $9265 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(2) How much loan did Anthony borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7245 to clear it?
(3) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(4) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(5) If Paul paid $5076 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.
(8) Barbara had to pay $3976 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?
(10) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?