Question:
Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.
Correct Answer
$7575
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 5%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $5050 × 5% × 10
= $5050 ×5/100 × 10
= 5050 × 5 × 10/100
= 25250 × 10/100
= 252500/100
= $2525
Thus, Simple Interest = $2525
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 = $5050 + $2525
= $7575
Thus, Amount to be paid = $7575 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 = $5050
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 10 years
Thus, Amount (A)
= $5050 + ($5050 × 5% × 10)
= $5050 + ($5050 ×5/100 × 10)
= $5050 + (5050 × 5 × 10/100)
= $5050 + (25250 × 10/100)
= $5050 + (252500/100)
= $5050 + $2525 = $7575
Thus, Amount (A) to be paid = $7575 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $5050, the simple interest in 1 year
= 5/100 × 5050
= 5 × 5050/100
= 25250/100 = $252.5
Thus, simple interest for 1 year = $252.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $252.5 × 10 = $2525
Thus, Simple Interest (SI) = $2525
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $2525
= $7575
Thus, Amount to be paid = $7575 Answer
Similar Questions
(1) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(3) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8415 to clear it?
(4) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(5) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(7) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
(8) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7980 to clear the loan, then find the time period of the loan.
(9) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 10% simple interest?
(10) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 3 years.