Question:
Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
Correct Answer
$6890
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 3% × 10
= $5300 ×3/100 × 10
= 5300 × 3 × 10/100
= 15900 × 10/100
= 159000/100
= $1590
Thus, Simple Interest = $1590
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 = $5300 + $1590
= $6890
Thus, Amount to be paid = $6890 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 = $5300
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5300 + ($5300 × 3% × 10)
= $5300 + ($5300 ×3/100 × 10)
= $5300 + (5300 × 3 × 10/100)
= $5300 + (15900 × 10/100)
= $5300 + (159000/100)
= $5300 + $1590 = $6890
Thus, Amount (A) to be paid = $6890 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 $5300, the simple interest in 1 year
= 3/100 × 5300
= 3 × 5300/100
= 15900/100 = $159
Thus, simple interest for 1 year = $159
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $159 × 10 = $1590
Thus, Simple Interest (SI) = $1590
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1590
= $6890
Thus, Amount to be paid = $6890 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 3% simple interest.
(2) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(4) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 4% simple interest.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 7 years.
(7) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(8) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?
(9) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 7 years.