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) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 3 years.
(2) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(3) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 10% simple interest?
(5) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.
(6) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?
(7) How much loan did Kevin borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7810 to clear it?
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 8 years.
(10) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.