Question:
Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
Correct Answer
$7280
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 4% × 10
= $5200 ×4/100 × 10
= 5200 × 4 × 10/100
= 20800 × 10/100
= 208000/100
= $2080
Thus, Simple Interest = $2080
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 = $5200 + $2080
= $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 = $5200
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5200 + ($5200 × 4% × 10)
= $5200 + ($5200 ×4/100 × 10)
= $5200 + (5200 × 4 × 10/100)
= $5200 + (20800 × 10/100)
= $5200 + (208000/100)
= $5200 + $2080 = $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 = 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 $5200, the simple interest in 1 year
= 4/100 × 5200
= 4 × 5200/100
= 20800/100 = $208
Thus, simple interest for 1 year = $208
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $208 × 10 = $2080
Thus, Simple Interest (SI) = $2080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $2080
= $7280
Thus, Amount to be paid = $7280 Answer
Similar Questions
(1) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) In how much time a principal of $3100 will amount to $3596 at a simple interest of 4% per annum?
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(5) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 7 years.
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 3 years.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 4 years.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 3 years.
(9) Andrew had to pay $5520 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 8 years.