Question:
Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
Correct Answer
$9775
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 7% × 10
= $5750 ×7/100 × 10
= 5750 × 7 × 10/100
= 40250 × 10/100
= 402500/100
= $4025
Thus, Simple Interest = $4025
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 = $5750 + $4025
= $9775
Thus, Amount to be paid = $9775 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 = $5750
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5750 + ($5750 × 7% × 10)
= $5750 + ($5750 ×7/100 × 10)
= $5750 + (5750 × 7 × 10/100)
= $5750 + (40250 × 10/100)
= $5750 + (402500/100)
= $5750 + $4025 = $9775
Thus, Amount (A) to be paid = $9775 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 $5750, the simple interest in 1 year
= 7/100 × 5750
= 7 × 5750/100
= 40250/100 = $402.5
Thus, simple interest for 1 year = $402.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $402.5 × 10 = $4025
Thus, Simple Interest (SI) = $4025
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $4025
= $9775
Thus, Amount to be paid = $9775 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(4) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.
(6) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(7) 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.
(8) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 4 years.
(9) Joshua had to pay $5194 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) If Ashley paid $4914 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.