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) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6888 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?
(3) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 8 years.
(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(5) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 8% simple interest?
(7) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?
(8) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?
(9) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 6% simple interest?