Question:
Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
Correct Answer
$8120
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 4% × 10
= $5800 ×4/100 × 10
= 5800 × 4 × 10/100
= 23200 × 10/100
= 232000/100
= $2320
Thus, Simple Interest = $2320
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 = $5800 + $2320
= $8120
Thus, Amount to be paid = $8120 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 = $5800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5800 + ($5800 × 4% × 10)
= $5800 + ($5800 ×4/100 × 10)
= $5800 + (5800 × 4 × 10/100)
= $5800 + (23200 × 10/100)
= $5800 + (232000/100)
= $5800 + $2320 = $8120
Thus, Amount (A) to be paid = $8120 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 $5800, the simple interest in 1 year
= 4/100 × 5800
= 4 × 5800/100
= 23200/100 = $232
Thus, simple interest for 1 year = $232
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $232 × 10 = $2320
Thus, Simple Interest (SI) = $2320
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $2320
= $8120
Thus, Amount to be paid = $8120 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6109 to clear the loan, then find the time period of the loan.
(2) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 7 years.
(4) If Jessica paid $4350 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(6) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 3 years.
(8) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(9) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 6% simple interest?
(10) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $10440 to clear the loan, then find the time period of the loan.