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) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(5) What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?
(6) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(7) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
(9) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(10) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 5% simple interest?