Question:
Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.
Correct Answer
$6780
Solution And Explanation
Solution
Given,
Principal (P) = $5650
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) = $5650 × 2% × 10
= $5650 ×2/100 × 10
= 5650 × 2 × 10/100
= 11300 × 10/100
= 113000/100
= $1130
Thus, Simple Interest = $1130
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 = $5650 + $1130
= $6780
Thus, Amount to be paid = $6780 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 = $5650
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5650 + ($5650 × 2% × 10)
= $5650 + ($5650 ×2/100 × 10)
= $5650 + (5650 × 2 × 10/100)
= $5650 + (11300 × 10/100)
= $5650 + (113000/100)
= $5650 + $1130 = $6780
Thus, Amount (A) to be paid = $6780 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 $5650, the simple interest in 1 year
= 2/100 × 5650
= 2 × 5650/100
= 11300/100 = $113
Thus, simple interest for 1 year = $113
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $113 × 10 = $1130
Thus, Simple Interest (SI) = $1130
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5650 + $1130
= $6780
Thus, Amount to be paid = $6780 Answer
Similar Questions
(1) If Mark paid $4752 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 7 years.
(4) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 4 years.
(5) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(6) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
(8) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 3 years.
(10) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 10% simple interest?