Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.
Correct Answer
$8400
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 5% × 10
= $5600 ×5/100 × 10
= 5600 × 5 × 10/100
= 28000 × 10/100
= 280000/100
= $2800
Thus, Simple Interest = $2800
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 = $5600 + $2800
= $8400
Thus, Amount to be paid = $8400 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 = $5600
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 5% × 10)
= $5600 + ($5600 ×5/100 × 10)
= $5600 + (5600 × 5 × 10/100)
= $5600 + (28000 × 10/100)
= $5600 + (280000/100)
= $5600 + $2800 = $8400
Thus, Amount (A) to be paid = $8400 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 $5600, the simple interest in 1 year
= 5/100 × 5600
= 5 × 5600/100
= 28000/100 = $280
Thus, simple interest for 1 year = $280
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $280 × 10 = $2800
Thus, Simple Interest (SI) = $2800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $2800
= $8400
Thus, Amount to be paid = $8400 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(3) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 3 years.
(5) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
(6) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.
(7) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?
(8) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
(9) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.
(10) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?