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 Elizabeth borrowed a sum of $3450 at 4% simple interest for 4 years.
(2) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(3) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?
(5) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(6) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?
(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 4 years.
(8) How much loan did Michelle borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8340 to clear it?
(9) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(10) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.