Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
Correct Answer
$6720
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 2% × 10
= $5600 ×2/100 × 10
= 5600 × 2 × 10/100
= 11200 × 10/100
= 112000/100
= $1120
Thus, Simple Interest = $1120
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 = $5600 + $1120
= $6720
Thus, Amount to be paid = $6720 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 = $5600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 2% × 10)
= $5600 + ($5600 ×2/100 × 10)
= $5600 + (5600 × 2 × 10/100)
= $5600 + (11200 × 10/100)
= $5600 + (112000/100)
= $5600 + $1120 = $6720
Thus, Amount (A) to be paid = $6720 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 $5600, the simple interest in 1 year
= 2/100 × 5600
= 2 × 5600/100
= 11200/100 = $112
Thus, simple interest for 1 year = $112
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $112 × 10 = $1120
Thus, Simple Interest (SI) = $1120
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1120
= $6720
Thus, Amount to be paid = $6720 Answer
Similar Questions
(1) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $14000 to clear the loan, then find the time period of the loan.
(2) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 10% simple interest?
(4) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(5) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 4% simple interest.
(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(8) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 6% simple interest?
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(10) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.