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) If Joshua paid $5880 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 8 years.
(3) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6540 to clear it?
(4) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 4 years.
(5) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?
(7) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(8) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(9) If David paid $3672 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 7% simple interest?