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) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?
(2) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 3% simple interest?
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(4) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(5) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(6) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(8) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(10) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7003 to clear the loan, then find the time period of the loan.