Question:
Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.
Correct Answer
$8050
Solution And Explanation
Solution
Given,
Principal (P) = $5750
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) = $5750 × 4% × 10
= $5750 ×4/100 × 10
= 5750 × 4 × 10/100
= 23000 × 10/100
= 230000/100
= $2300
Thus, Simple Interest = $2300
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 = $5750 + $2300
= $8050
Thus, Amount to be paid = $8050 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 = $5750
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5750 + ($5750 × 4% × 10)
= $5750 + ($5750 ×4/100 × 10)
= $5750 + (5750 × 4 × 10/100)
= $5750 + (23000 × 10/100)
= $5750 + (230000/100)
= $5750 + $2300 = $8050
Thus, Amount (A) to be paid = $8050 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 $5750, the simple interest in 1 year
= 4/100 × 5750
= 4 × 5750/100
= 23000/100 = $230
Thus, simple interest for 1 year = $230
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $230 × 10 = $2300
Thus, Simple Interest (SI) = $2300
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5750 + $2300
= $8050
Thus, Amount to be paid = $8050 Answer
Similar Questions
(1) What amount does William have to pay after 6 years if he takes a loan of $3500 at 3% simple interest?
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(3) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.
(4) How much loan did Nancy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7687.5 to clear it?
(5) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 9% simple interest.
(6) Joshua had to pay $5635 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?
(8) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 9% simple interest?
(10) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.