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) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(4) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(6) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?
(7) If Charles borrowed $3900 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.