Question:
Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
Correct Answer
$6060
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 2%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $5050 × 2% × 10
= $5050 ×2/100 × 10
= 5050 × 2 × 10/100
= 10100 × 10/100
= 101000/100
= $1010
Thus, Simple Interest = $1010
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 = $5050 + $1010
= $6060
Thus, Amount to be paid = $6060 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 = $5050
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5050 + ($5050 × 2% × 10)
= $5050 + ($5050 ×2/100 × 10)
= $5050 + (5050 × 2 × 10/100)
= $5050 + (10100 × 10/100)
= $5050 + (101000/100)
= $5050 + $1010 = $6060
Thus, Amount (A) to be paid = $6060 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5050, the simple interest in 1 year
= 2/100 × 5050
= 2 × 5050/100
= 10100/100 = $101
Thus, simple interest for 1 year = $101
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $101 × 10 = $1010
Thus, Simple Interest (SI) = $1010
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $1010
= $6060
Thus, Amount to be paid = $6060 Answer
Similar Questions
(1) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 2% simple interest?
(2) How much loan did Thomas borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6670 to clear it?
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 10% simple interest for 4 years.
(5) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
(6) How much loan did George borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9125 to clear it?
(7) If Kimberly paid $5208 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(9) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 4 years.