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) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(2) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 3 years.
(4) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(6) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(8) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(9) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.