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 after 9 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
(2) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(4) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?
(5) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 6% simple interest?
(7) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(8) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7392 to clear the loan, then find the time period of the loan.
(9) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.