Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
Correct Answer
$8325
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 5% × 10
= $5550 ×5/100 × 10
= 5550 × 5 × 10/100
= 27750 × 10/100
= 277500/100
= $2775
Thus, Simple Interest = $2775
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 = $5550 + $2775
= $8325
Thus, Amount to be paid = $8325 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 = $5550
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 5% × 10)
= $5550 + ($5550 ×5/100 × 10)
= $5550 + (5550 × 5 × 10/100)
= $5550 + (27750 × 10/100)
= $5550 + (277500/100)
= $5550 + $2775 = $8325
Thus, Amount (A) to be paid = $8325 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 $5550, the simple interest in 1 year
= 5/100 × 5550
= 5 × 5550/100
= 27750/100 = $277.5
Thus, simple interest for 1 year = $277.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $277.5 × 10 = $2775
Thus, Simple Interest (SI) = $2775
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $2775
= $8325
Thus, Amount to be paid = $8325 Answer
Similar Questions
(1) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 3 years.
(3) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 4 years.
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 3 years.
(7) If Christopher borrowed $4000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(10) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?