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) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(2) If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 4% simple interest?
(4) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 8 years.
(5) In how much time a principal of $3050 will amount to $3294 at a simple interest of 2% per annum?
(6) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.
(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?