Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
Correct Answer
$7280
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 3% × 10
= $5600 ×3/100 × 10
= 5600 × 3 × 10/100
= 16800 × 10/100
= 168000/100
= $1680
Thus, Simple Interest = $1680
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 = $5600 + $1680
= $7280
Thus, Amount to be paid = $7280 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 = $5600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 3% × 10)
= $5600 + ($5600 ×3/100 × 10)
= $5600 + (5600 × 3 × 10/100)
= $5600 + (16800 × 10/100)
= $5600 + (168000/100)
= $5600 + $1680 = $7280
Thus, Amount (A) to be paid = $7280 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 $5600, the simple interest in 1 year
= 3/100 × 5600
= 3 × 5600/100
= 16800/100 = $168
Thus, simple interest for 1 year = $168
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $168 × 10 = $1680
Thus, Simple Interest (SI) = $1680
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1680
= $7280
Thus, Amount to be paid = $7280 Answer
Similar Questions
(1) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.
(2) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(3) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(4) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 7 years.
(7) Donald had to pay $5040 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(9) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(10) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?