Question:
Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 4% simple interest.
Correct Answer
$7560
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 4% × 10
= $5400 ×4/100 × 10
= 5400 × 4 × 10/100
= 21600 × 10/100
= 216000/100
= $2160
Thus, Simple Interest = $2160
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 = $5400 + $2160
= $7560
Thus, Amount to be paid = $7560 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 = $5400
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5400 + ($5400 × 4% × 10)
= $5400 + ($5400 ×4/100 × 10)
= $5400 + (5400 × 4 × 10/100)
= $5400 + (21600 × 10/100)
= $5400 + (216000/100)
= $5400 + $2160 = $7560
Thus, Amount (A) to be paid = $7560 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 $5400, the simple interest in 1 year
= 4/100 × 5400
= 4 × 5400/100
= 21600/100 = $216
Thus, simple interest for 1 year = $216
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $216 × 10 = $2160
Thus, Simple Interest (SI) = $2160
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $2160
= $7560
Thus, Amount to be paid = $7560 Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 5% simple interest for 8 years.
(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(4) How much loan did Susan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6497.5 to clear it?
(5) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?
(6) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(7) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 7 years.
(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 3% simple interest?