Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
Correct Answer
$7840
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 4% × 10
= $5600 ×4/100 × 10
= 5600 × 4 × 10/100
= 22400 × 10/100
= 224000/100
= $2240
Thus, Simple Interest = $2240
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 = $5600 + $2240
= $7840
Thus, Amount to be paid = $7840 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 = $5600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 4% × 10)
= $5600 + ($5600 ×4/100 × 10)
= $5600 + (5600 × 4 × 10/100)
= $5600 + (22400 × 10/100)
= $5600 + (224000/100)
= $5600 + $2240 = $7840
Thus, Amount (A) to be paid = $7840 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 $5600, the simple interest in 1 year
= 4/100 × 5600
= 4 × 5600/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $224 × 10 = $2240
Thus, Simple Interest (SI) = $2240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $2240
= $7840
Thus, Amount to be paid = $7840 Answer
Similar Questions
(1) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8024 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3150 will amount to $3339 at a simple interest of 2% per annum?
(3) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
(4) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 2% simple interest?
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(6) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(7) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(9) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?
(10) In how much time a principal of $3150 will amount to $3528 at a simple interest of 3% per annum?