Question:
Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
Correct Answer
$7080
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 2% × 10
= $5900 ×2/100 × 10
= 5900 × 2 × 10/100
= 11800 × 10/100
= 118000/100
= $1180
Thus, Simple Interest = $1180
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 = $5900 + $1180
= $7080
Thus, Amount to be paid = $7080 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 = $5900
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 10 years
Thus, Amount (A)
= $5900 + ($5900 × 2% × 10)
= $5900 + ($5900 ×2/100 × 10)
= $5900 + (5900 × 2 × 10/100)
= $5900 + (11800 × 10/100)
= $5900 + (118000/100)
= $5900 + $1180 = $7080
Thus, Amount (A) to be paid = $7080 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 $5900, the simple interest in 1 year
= 2/100 × 5900
= 2 × 5900/100
= 11800/100 = $118
Thus, simple interest for 1 year = $118
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $118 × 10 = $1180
Thus, Simple Interest (SI) = $1180
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $1180
= $7080
Thus, Amount to be paid = $7080 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 5% simple interest for 8 years.
(3) If Christopher paid $4640 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 9% simple interest?
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 4% simple interest?
(6) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.
(7) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 7% simple interest?
(9) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 7 years.