Question:
Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
Correct Answer
$6480
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 2% × 10
= $5400 ×2/100 × 10
= 5400 × 2 × 10/100
= 10800 × 10/100
= 108000/100
= $1080
Thus, Simple Interest = $1080
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 = $5400 + $1080
= $6480
Thus, Amount to be paid = $6480 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 = $5400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5400 + ($5400 × 2% × 10)
= $5400 + ($5400 ×2/100 × 10)
= $5400 + (5400 × 2 × 10/100)
= $5400 + (10800 × 10/100)
= $5400 + (108000/100)
= $5400 + $1080 = $6480
Thus, Amount (A) to be paid = $6480 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 $5400, the simple interest in 1 year
= 2/100 × 5400
= 2 × 5400/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $108 × 10 = $1080
Thus, Simple Interest (SI) = $1080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $1080
= $6480
Thus, Amount to be paid = $6480 Answer
Similar Questions
(1) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(2) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(4) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(6) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(7) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 6% simple interest?
(10) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?