Question:
Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
Correct Answer
$6960
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 2% × 10
= $5800 ×2/100 × 10
= 5800 × 2 × 10/100
= 11600 × 10/100
= 116000/100
= $1160
Thus, Simple Interest = $1160
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 = $5800 + $1160
= $6960
Thus, Amount to be paid = $6960 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 = $5800
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5800 + ($5800 × 2% × 10)
= $5800 + ($5800 ×2/100 × 10)
= $5800 + (5800 × 2 × 10/100)
= $5800 + (11600 × 10/100)
= $5800 + (116000/100)
= $5800 + $1160 = $6960
Thus, Amount (A) to be paid = $6960 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 $5800, the simple interest in 1 year
= 2/100 × 5800
= 2 × 5800/100
= 11600/100 = $116
Thus, simple interest for 1 year = $116
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $116 × 10 = $1160
Thus, Simple Interest (SI) = $1160
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $1160
= $6960
Thus, Amount to be paid = $6960 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 3 years.
(2) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6109 to clear the loan, then find the time period of the loan.
(3) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $12200 to clear the loan, then find the time period of the loan.
(5) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(6) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(8) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 8% simple interest?
(9) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
(10) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.