Question:
Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 4% simple interest.
Correct Answer
$7070
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 4%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $5050 × 4% × 10
= $5050 ×4/100 × 10
= 5050 × 4 × 10/100
= 20200 × 10/100
= 202000/100
= $2020
Thus, Simple Interest = $2020
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 = $5050 + $2020
= $7070
Thus, Amount to be paid = $7070 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 = $5050
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5050 + ($5050 × 4% × 10)
= $5050 + ($5050 ×4/100 × 10)
= $5050 + (5050 × 4 × 10/100)
= $5050 + (20200 × 10/100)
= $5050 + (202000/100)
= $5050 + $2020 = $7070
Thus, Amount (A) to be paid = $7070 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5050, the simple interest in 1 year
= 4/100 × 5050
= 4 × 5050/100
= 20200/100 = $202
Thus, simple interest for 1 year = $202
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $202 × 10 = $2020
Thus, Simple Interest (SI) = $2020
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $2020
= $7070
Thus, Amount to be paid = $7070 Answer
Similar Questions
(1) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 3 years.
(2) Find the amount to be paid if Karen borrowed a sum of $5950 at 2% simple interest for 7 years.
(3) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 7% simple interest?
(5) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9937.5 to clear it?
(6) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $7888 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if David borrowed a sum of $3400 at 2% simple interest for 4 years.
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.
(9) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(10) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 5% simple interest?