Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
Correct Answer
$7215
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 3% × 10
= $5550 ×3/100 × 10
= 5550 × 3 × 10/100
= 16650 × 10/100
= 166500/100
= $1665
Thus, Simple Interest = $1665
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 = $5550 + $1665
= $7215
Thus, Amount to be paid = $7215 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 = $5550
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 3% × 10)
= $5550 + ($5550 ×3/100 × 10)
= $5550 + (5550 × 3 × 10/100)
= $5550 + (16650 × 10/100)
= $5550 + (166500/100)
= $5550 + $1665 = $7215
Thus, Amount (A) to be paid = $7215 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 $5550, the simple interest in 1 year
= 3/100 × 5550
= 3 × 5550/100
= 16650/100 = $166.5
Thus, simple interest for 1 year = $166.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $166.5 × 10 = $1665
Thus, Simple Interest (SI) = $1665
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $1665
= $7215
Thus, Amount to be paid = $7215 Answer
Similar Questions
(1) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 4 years.
(2) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 10% simple interest?
(3) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.
(4) If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 5% simple interest?
(6) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8940 to clear the loan, then find the time period of the loan.
(7) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(8) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 3% simple interest?