Question:
Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
Correct Answer
$8190
Solution And Explanation
Solution
Given,
Principal (P) = $5850
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) = $5850 × 4% × 10
= $5850 ×4/100 × 10
= 5850 × 4 × 10/100
= 23400 × 10/100
= 234000/100
= $2340
Thus, Simple Interest = $2340
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 = $5850 + $2340
= $8190
Thus, Amount to be paid = $8190 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 = $5850
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5850 + ($5850 × 4% × 10)
= $5850 + ($5850 ×4/100 × 10)
= $5850 + (5850 × 4 × 10/100)
= $5850 + (23400 × 10/100)
= $5850 + (234000/100)
= $5850 + $2340 = $8190
Thus, Amount (A) to be paid = $8190 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 $5850, the simple interest in 1 year
= 4/100 × 5850
= 4 × 5850/100
= 23400/100 = $234
Thus, simple interest for 1 year = $234
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $234 × 10 = $2340
Thus, Simple Interest (SI) = $2340
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5850 + $2340
= $8190
Thus, Amount to be paid = $8190 Answer
Similar Questions
(1) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(2) 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?
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 2% simple interest for 4 years.
(4) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 7 years.
(6) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 4 years.
(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 4 years.
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 9% simple interest?