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) How much loan did Jessica borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7187.5 to clear it?
(2) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $12000 to clear the loan, then find the time period of the loan.
(3) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 9% simple interest?
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 3 years.
(5) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(6) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(7) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10640 to clear the loan, then find the time period of the loan.
(8) If Daniel paid $4592 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 7 years.
(10) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?