Question:
Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
Correct Answer
$6360
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 2% × 10
= $5300 ×2/100 × 10
= 5300 × 2 × 10/100
= 10600 × 10/100
= 106000/100
= $1060
Thus, Simple Interest = $1060
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 = $5300 + $1060
= $6360
Thus, Amount to be paid = $6360 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 = $5300
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5300 + ($5300 × 2% × 10)
= $5300 + ($5300 ×2/100 × 10)
= $5300 + (5300 × 2 × 10/100)
= $5300 + (10600 × 10/100)
= $5300 + (106000/100)
= $5300 + $1060 = $6360
Thus, Amount (A) to be paid = $6360 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 $5300, the simple interest in 1 year
= 2/100 × 5300
= 2 × 5300/100
= 10600/100 = $106
Thus, simple interest for 1 year = $106
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $106 × 10 = $1060
Thus, Simple Interest (SI) = $1060
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1060
= $6360
Thus, Amount to be paid = $6360 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.
(2) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(3) Find the amount to be paid if David borrowed a sum of $5400 at 7% simple interest for 8 years.
(4) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 9% simple interest?
(5) How much loan did David borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5940 to clear it?
(6) Susan had to pay $4197.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) In how much time a principal of $3000 will amount to $3240 at a simple interest of 2% per annum?
(8) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?