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) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(3) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 6% simple interest?
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(5) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(6) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 8 years.
(8) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
(10) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 2% simple interest?