Question:
Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
Correct Answer
$8000
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 6%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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) = $5000 × 6% × 10
= $5000 ×6/100 × 10
= 5000 × 6 × 10/100
= 30000 × 10/100
= 300000/100
= $3000
Thus, Simple Interest = $3000
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 = $5000 + $3000
= $8000
Thus, Amount to be paid = $8000 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 = $5000
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 10 years
Thus, Amount (A)
= $5000 + ($5000 × 6% × 10)
= $5000 + ($5000 ×6/100 × 10)
= $5000 + (5000 × 6 × 10/100)
= $5000 + (30000 × 10/100)
= $5000 + (300000/100)
= $5000 + $3000 = $8000
Thus, Amount (A) to be paid = $8000 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $5000, the simple interest in 1 year
= 6/100 × 5000
= 6 × 5000/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $300 × 10 = $3000
Thus, Simple Interest (SI) = $3000
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $3000
= $8000
Thus, Amount to be paid = $8000 Answer
Similar Questions
(1) In how much time a principal of $3100 will amount to $3286 at a simple interest of 2% per annum?
(2) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(3) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
(6) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 7% simple interest?
(7) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7599 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 10% simple interest?
(9) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(10) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?