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) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(2) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(4) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
(5) If Donna paid $5820 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?
(7) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 3 years.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(9) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 4% simple interest?
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.