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) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
(3) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 7% simple interest?
(5) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(7) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(8) David had to pay $3604 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
(10) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 7 years.