Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
Correct Answer
$8880
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 6% × 10
= $5550 ×6/100 × 10
= 5550 × 6 × 10/100
= 33300 × 10/100
= 333000/100
= $3330
Thus, Simple Interest = $3330
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 = $5550 + $3330
= $8880
Thus, Amount to be paid = $8880 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 = $5550
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 6% × 10)
= $5550 + ($5550 ×6/100 × 10)
= $5550 + (5550 × 6 × 10/100)
= $5550 + (33300 × 10/100)
= $5550 + (333000/100)
= $5550 + $3330 = $8880
Thus, Amount (A) to be paid = $8880 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 $5550, the simple interest in 1 year
= 6/100 × 5550
= 6 × 5550/100
= 33300/100 = $333
Thus, simple interest for 1 year = $333
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $333 × 10 = $3330
Thus, Simple Interest (SI) = $3330
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3330
= $8880
Thus, Amount to be paid = $8880 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 3 years.
(2) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9685 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if David borrowed a sum of $3200 at a 4% simple interest?
(4) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(6) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(7) In how much time a principal of $3200 will amount to $3520 at a simple interest of 2% per annum?
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.
(10) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 8% simple interest?