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) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(2) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(3) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.
(5) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(6) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
(7) Anthony had to pay $4945 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(9) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
(10) Donald had to pay $5175 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.