Question:
Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 3% simple interest.
Correct Answer
$6760
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 3% × 10
= $5200 ×3/100 × 10
= 5200 × 3 × 10/100
= 15600 × 10/100
= 156000/100
= $1560
Thus, Simple Interest = $1560
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 = $5200 + $1560
= $6760
Thus, Amount to be paid = $6760 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 = $5200
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5200 + ($5200 × 3% × 10)
= $5200 + ($5200 ×3/100 × 10)
= $5200 + (5200 × 3 × 10/100)
= $5200 + (15600 × 10/100)
= $5200 + (156000/100)
= $5200 + $1560 = $6760
Thus, Amount (A) to be paid = $6760 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 $5200, the simple interest in 1 year
= 3/100 × 5200
= 3 × 5200/100
= 15600/100 = $156
Thus, simple interest for 1 year = $156
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $156 × 10 = $1560
Thus, Simple Interest (SI) = $1560
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $1560
= $6760
Thus, Amount to be paid = $6760 Answer
Similar Questions
(1) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 3 years.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(4) In how much time a principal of $3150 will amount to $3433.5 at a simple interest of 3% per annum?
(5) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(6) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 5% simple interest.
(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 8 years.
(9) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.