Question:
Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
Correct Answer
$6500
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 3%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $5000 × 3% × 10
= $5000 ×3/100 × 10
= 5000 × 3 × 10/100
= 15000 × 10/100
= 150000/100
= $1500
Thus, Simple Interest = $1500
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 = $5000 + $1500
= $6500
Thus, Amount to be paid = $6500 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 = $5000
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5000 + ($5000 × 3% × 10)
= $5000 + ($5000 ×3/100 × 10)
= $5000 + (5000 × 3 × 10/100)
= $5000 + (15000 × 10/100)
= $5000 + (150000/100)
= $5000 + $1500 = $6500
Thus, Amount (A) to be paid = $6500 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5000, the simple interest in 1 year
= 3/100 × 5000
= 3 × 5000/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $150 × 10 = $1500
Thus, Simple Interest (SI) = $1500
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $1500
= $6500
Thus, Amount to be paid = $6500 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 7 years.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 8 years.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 7% simple interest for 4 years.
(6) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
(9) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 4% simple interest?
(10) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.