Question:
Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
Correct Answer
$7490
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 4% × 10
= $5350 ×4/100 × 10
= 5350 × 4 × 10/100
= 21400 × 10/100
= 214000/100
= $2140
Thus, Simple Interest = $2140
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 = $5350 + $2140
= $7490
Thus, Amount to be paid = $7490 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 = $5350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5350 + ($5350 × 4% × 10)
= $5350 + ($5350 ×4/100 × 10)
= $5350 + (5350 × 4 × 10/100)
= $5350 + (21400 × 10/100)
= $5350 + (214000/100)
= $5350 + $2140 = $7490
Thus, Amount (A) to be paid = $7490 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 $5350, the simple interest in 1 year
= 4/100 × 5350
= 4 × 5350/100
= 21400/100 = $214
Thus, simple interest for 1 year = $214
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $214 × 10 = $2140
Thus, Simple Interest (SI) = $2140
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $2140
= $7490
Thus, Amount to be paid = $7490 Answer
Similar Questions
(1) How much loan did Timothy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8880 to clear it?
(2) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6664 to clear the loan, then find the time period of the loan.
(3) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(6) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 6% simple interest?
(8) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 4% simple interest?