Question:
Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
Correct Answer
$8330
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 4% × 10
= $5950 ×4/100 × 10
= 5950 × 4 × 10/100
= 23800 × 10/100
= 238000/100
= $2380
Thus, Simple Interest = $2380
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 = $5950 + $2380
= $8330
Thus, Amount to be paid = $8330 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 = $5950
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 10 years
Thus, Amount (A)
= $5950 + ($5950 × 4% × 10)
= $5950 + ($5950 ×4/100 × 10)
= $5950 + (5950 × 4 × 10/100)
= $5950 + (23800 × 10/100)
= $5950 + (238000/100)
= $5950 + $2380 = $8330
Thus, Amount (A) to be paid = $8330 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 $5950, the simple interest in 1 year
= 4/100 × 5950
= 4 × 5950/100
= 23800/100 = $238
Thus, simple interest for 1 year = $238
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $238 × 10 = $2380
Thus, Simple Interest (SI) = $2380
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $2380
= $8330
Thus, Amount to be paid = $8330 Answer
Similar Questions
(1) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
(2) How much loan did Jason borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8470 to clear it?
(3) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(4) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(5) How much loan did Mark borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7040 to clear it?
(6) If Patricia borrowed $3150 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Kimberly had to pay $5208 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(9) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.