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) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 3 years.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 8 years.
(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(5) If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(7) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(8) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 4 years.
(10) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.