Question:
Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 4% simple interest.
Correct Answer
$8260
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 4% × 10
= $5900 ×4/100 × 10
= 5900 × 4 × 10/100
= 23600 × 10/100
= 236000/100
= $2360
Thus, Simple Interest = $2360
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 = $5900 + $2360
= $8260
Thus, Amount to be paid = $8260 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 = $5900
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5900 + ($5900 × 4% × 10)
= $5900 + ($5900 ×4/100 × 10)
= $5900 + (5900 × 4 × 10/100)
= $5900 + (23600 × 10/100)
= $5900 + (236000/100)
= $5900 + $2360 = $8260
Thus, Amount (A) to be paid = $8260 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 $5900, the simple interest in 1 year
= 4/100 × 5900
= 4 × 5900/100
= 23600/100 = $236
Thus, simple interest for 1 year = $236
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $236 × 10 = $2360
Thus, Simple Interest (SI) = $2360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $2360
= $8260
Thus, Amount to be paid = $8260 Answer
Similar Questions
(1) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $10000 to clear the loan, then find the time period of the loan.
(2) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(3) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8036 to clear the loan, then find the time period of the loan.
(4) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?
(5) Find the amount to be paid if Charles borrowed a sum of $5900 at 3% simple interest for 7 years.
(6) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 6% simple interest?
(7) What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?
(8) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?