Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 6% simple interest.
Correct Answer
$8960
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 6% × 10
= $5600 ×6/100 × 10
= 5600 × 6 × 10/100
= 33600 × 10/100
= 336000/100
= $3360
Thus, Simple Interest = $3360
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 = $5600 + $3360
= $8960
Thus, Amount to be paid = $8960 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 = $5600
Rate of Simple Interest (SI) or (R) = 6%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 6% × 10)
= $5600 + ($5600 ×6/100 × 10)
= $5600 + (5600 × 6 × 10/100)
= $5600 + (33600 × 10/100)
= $5600 + (336000/100)
= $5600 + $3360 = $8960
Thus, Amount (A) to be paid = $8960 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 $5600, the simple interest in 1 year
= 6/100 × 5600
= 6 × 5600/100
= 33600/100 = $336
Thus, simple interest for 1 year = $336
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $336 × 10 = $3360
Thus, Simple Interest (SI) = $3360
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $3360
= $8960
Thus, Amount to be paid = $8960 Answer
Similar Questions
(1) What amount will be due after 2 years if William borrowed a sum of $3250 at a 10% simple interest?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.
(3) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Christopher had to pay $4600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?
(6) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(7) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.