Question:
Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
Correct Answer
$8320
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 6% × 10
= $5200 ×6/100 × 10
= 5200 × 6 × 10/100
= 31200 × 10/100
= 312000/100
= $3120
Thus, Simple Interest = $3120
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 = $5200 + $3120
= $8320
Thus, Amount to be paid = $8320 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 = $5200
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 10 years
Thus, Amount (A)
= $5200 + ($5200 × 6% × 10)
= $5200 + ($5200 ×6/100 × 10)
= $5200 + (5200 × 6 × 10/100)
= $5200 + (31200 × 10/100)
= $5200 + (312000/100)
= $5200 + $3120 = $8320
Thus, Amount (A) to be paid = $8320 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 $5200, the simple interest in 1 year
= 6/100 × 5200
= 6 × 5200/100
= 31200/100 = $312
Thus, simple interest for 1 year = $312
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $312 × 10 = $3120
Thus, Simple Interest (SI) = $3120
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $3120
= $8320
Thus, Amount to be paid = $8320 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 3 years.
(2) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 7% simple interest?
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(4) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 8% simple interest?
(5) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 7 years.
(6) James had to pay $3270 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.
(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 2% simple interest?
(10) What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?