Question:
Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
Correct Answer
$6420
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 2% × 10
= $5350 ×2/100 × 10
= 5350 × 2 × 10/100
= 10700 × 10/100
= 107000/100
= $1070
Thus, Simple Interest = $1070
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 = $5350 + $1070
= $6420
Thus, Amount to be paid = $6420 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 = $5350
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5350 + ($5350 × 2% × 10)
= $5350 + ($5350 ×2/100 × 10)
= $5350 + (5350 × 2 × 10/100)
= $5350 + (10700 × 10/100)
= $5350 + (107000/100)
= $5350 + $1070 = $6420
Thus, Amount (A) to be paid = $6420 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 $5350, the simple interest in 1 year
= 2/100 × 5350
= 2 × 5350/100
= 10700/100 = $107
Thus, simple interest for 1 year = $107
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $107 × 10 = $1070
Thus, Simple Interest (SI) = $1070
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1070
= $6420
Thus, Amount to be paid = $6420 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 6% simple interest for 3 years.
(4) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?
(5) What amount will be due after 2 years if David borrowed a sum of $3200 at a 7% simple interest?
(6) In how much time a principal of $3050 will amount to $3233 at a simple interest of 2% per annum?
(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
(8) What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?
(9) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(10) How much loan did Melissa borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8452.5 to clear it?