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) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
(2) How much loan did Charles borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7375 to clear it?
(3) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.
(5) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $6816 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 4% simple interest?
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.
(8) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(9) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.
(10) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.