Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
Correct Answer
$7770
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 4% × 10
= $5550 ×4/100 × 10
= 5550 × 4 × 10/100
= 22200 × 10/100
= 222000/100
= $2220
Thus, Simple Interest = $2220
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 = $5550 + $2220
= $7770
Thus, Amount to be paid = $7770 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 = $5550
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 4% × 10)
= $5550 + ($5550 ×4/100 × 10)
= $5550 + (5550 × 4 × 10/100)
= $5550 + (22200 × 10/100)
= $5550 + (222000/100)
= $5550 + $2220 = $7770
Thus, Amount (A) to be paid = $7770 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 $5550, the simple interest in 1 year
= 4/100 × 5550
= 4 × 5550/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $222 × 10 = $2220
Thus, Simple Interest (SI) = $2220
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $2220
= $7770
Thus, Amount to be paid = $7770 Answer
Similar Questions
(1) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6888 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(3) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(5) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(6) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(7) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 7% simple interest?
(8) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(9) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.