Question:
Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
Correct Answer
$8025
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 5% × 10
= $5350 ×5/100 × 10
= 5350 × 5 × 10/100
= 26750 × 10/100
= 267500/100
= $2675
Thus, Simple Interest = $2675
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 = $5350 + $2675
= $8025
Thus, Amount to be paid = $8025 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 = $5350
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 10 years
Thus, Amount (A)
= $5350 + ($5350 × 5% × 10)
= $5350 + ($5350 ×5/100 × 10)
= $5350 + (5350 × 5 × 10/100)
= $5350 + (26750 × 10/100)
= $5350 + (267500/100)
= $5350 + $2675 = $8025
Thus, Amount (A) to be paid = $8025 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 $5350, the simple interest in 1 year
= 5/100 × 5350
= 5 × 5350/100
= 26750/100 = $267.5
Thus, simple interest for 1 year = $267.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $267.5 × 10 = $2675
Thus, Simple Interest (SI) = $2675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $2675
= $8025
Thus, Amount to be paid = $8025 Answer
Similar Questions
(1) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(3) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(4) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?
(5) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(6) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 5% simple interest?
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 8 years.
(9) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?
(10) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.