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) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 7 years.
(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(3) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(5) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9540 to clear it?
(6) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 4 years.
(7) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 7 years.
(8) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 9% simple interest?
(9) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(10) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.