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) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(2) How much loan did Ronald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8625 to clear it?
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(4) How much loan did Edward borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8360 to clear it?
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.
(6) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?
(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?
(9) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 9% simple interest?
(10) Jessica had to pay $4200 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.