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) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(2) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(3) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(4) If Mary paid $3660 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
(7) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 4 years.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 8 years.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 7 years.