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 after 9 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(2) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 2% simple interest?
(3) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
(4) If Ashley paid $5096 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 2% simple interest?
(7) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.
(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.