Question:
Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
Correct Answer
$7020
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 3% × 10
= $5400 ×3/100 × 10
= 5400 × 3 × 10/100
= 16200 × 10/100
= 162000/100
= $1620
Thus, Simple Interest = $1620
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 = $5400 + $1620
= $7020
Thus, Amount to be paid = $7020 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 = $5400
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5400 + ($5400 × 3% × 10)
= $5400 + ($5400 ×3/100 × 10)
= $5400 + (5400 × 3 × 10/100)
= $5400 + (16200 × 10/100)
= $5400 + (162000/100)
= $5400 + $1620 = $7020
Thus, Amount (A) to be paid = $7020 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 $5400, the simple interest in 1 year
= 3/100 × 5400
= 3 × 5400/100
= 16200/100 = $162
Thus, simple interest for 1 year = $162
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $162 × 10 = $1620
Thus, Simple Interest (SI) = $1620
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $1620
= $7020
Thus, Amount to be paid = $7020 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.
(2) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?
(3) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $10240 to clear the loan, then find the time period of the loan.
(4) How much loan did Paul borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8040 to clear it?
(5) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 3 years.
(7) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 8 years.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.
(10) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?