Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
Correct Answer
$6660
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 2% × 10
= $5550 ×2/100 × 10
= 5550 × 2 × 10/100
= 11100 × 10/100
= 111000/100
= $1110
Thus, Simple Interest = $1110
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 = $5550 + $1110
= $6660
Thus, Amount to be paid = $6660 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 = $5550
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 2% × 10)
= $5550 + ($5550 ×2/100 × 10)
= $5550 + (5550 × 2 × 10/100)
= $5550 + (11100 × 10/100)
= $5550 + (111000/100)
= $5550 + $1110 = $6660
Thus, Amount (A) to be paid = $6660 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 $5550, the simple interest in 1 year
= 2/100 × 5550
= 2 × 5550/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $111 × 10 = $1110
Thus, Simple Interest (SI) = $1110
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $1110
= $6660
Thus, Amount to be paid = $6660 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(3) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?
(4) How much loan did Ashley borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7205 to clear it?
(5) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(8) Jessica had to pay $4087.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $8360 to clear the loan, then find the time period of the loan.
(10) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10430 to clear the loan, then find the time period of the loan.