Question:
Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
Correct Answer
$8925
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 5% × 10
= $5950 ×5/100 × 10
= 5950 × 5 × 10/100
= 29750 × 10/100
= 297500/100
= $2975
Thus, Simple Interest = $2975
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 + $2975
= $8925
Thus, Amount to be paid = $8925 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) = 5%
And, Time (t) = 10 years
Thus, Amount (A)
= $5950 + ($5950 × 5% × 10)
= $5950 + ($5950 ×5/100 × 10)
= $5950 + (5950 × 5 × 10/100)
= $5950 + (29750 × 10/100)
= $5950 + (297500/100)
= $5950 + $2975 = $8925
Thus, Amount (A) to be paid = $8925 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 $5950, the simple interest in 1 year
= 5/100 × 5950
= 5 × 5950/100
= 29750/100 = $297.5
Thus, simple interest for 1 year = $297.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $297.5 × 10 = $2975
Thus, Simple Interest (SI) = $2975
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $2975
= $8925
Thus, Amount to be paid = $8925 Answer
Similar Questions
(1) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(2) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 3% simple interest?
(3) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.
(4) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?
(5) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.
(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(8) How much loan did William borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6325 to clear it?
(9) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) If Anthony paid $4988 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.