Question:
Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 2% simple interest.
Correct Answer
$6900
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 2% × 10
= $5750 ×2/100 × 10
= 5750 × 2 × 10/100
= 11500 × 10/100
= 115000/100
= $1150
Thus, Simple Interest = $1150
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 = $5750 + $1150
= $6900
Thus, Amount to be paid = $6900 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 = $5750
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5750 + ($5750 × 2% × 10)
= $5750 + ($5750 ×2/100 × 10)
= $5750 + (5750 × 2 × 10/100)
= $5750 + (11500 × 10/100)
= $5750 + (115000/100)
= $5750 + $1150 = $6900
Thus, Amount (A) to be paid = $6900 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 $5750, the simple interest in 1 year
= 2/100 × 5750
= 2 × 5750/100
= 11500/100 = $115
Thus, simple interest for 1 year = $115
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $115 × 10 = $1150
Thus, Simple Interest (SI) = $1150
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $1150
= $6900
Thus, Amount to be paid = $6900 Answer
Similar Questions
(1) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(2) How much loan did Jacob borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8800 to clear it?
(3) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(5) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 6% simple interest?
(6) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.
(7) If Donald paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(9) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.