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 Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
(2) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 4 years.
(3) How much loan did Joshua borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7935 to clear it?
(4) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.
(5) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(6) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.
(7) How much loan did Joshua borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7590 to clear it?
(8) How much loan did Deborah borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8567.5 to clear it?
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.