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) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(2) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(3) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?
(4) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.
(5) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(7) If Barbara borrowed $3550 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(9) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(10) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.