Question:
Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
Correct Answer
$8840
Solution And Explanation
Solution
Given,
Principal (P) = $5200
Rate of Simple Interest (SI) = 7%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 10
= $5200 ×7/100 × 10
= 5200 × 7 × 10/100
= 36400 × 10/100
= 364000/100
= $3640
Thus, Simple Interest = $3640
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 + $3640
= $8840
Thus, Amount to be paid = $8840 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) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5200 + ($5200 × 7% × 10)
= $5200 + ($5200 ×7/100 × 10)
= $5200 + (5200 × 7 × 10/100)
= $5200 + (36400 × 10/100)
= $5200 + (364000/100)
= $5200 + $3640 = $8840
Thus, Amount (A) to be paid = $8840 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5200, the simple interest in 1 year
= 7/100 × 5200
= 7 × 5200/100
= 36400/100 = $364
Thus, simple interest for 1 year = $364
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $364 × 10 = $3640
Thus, Simple Interest (SI) = $3640
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $3640
= $8840
Thus, Amount to be paid = $8840 Answer
Similar Questions
(1) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
(2) Jennifer had to pay $3640 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) What amount does James have to pay after 5 years if he takes a loan of $3000 at 8% simple interest?
(4) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(6) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 3% simple interest?
(7) Find the amount to be paid if John borrowed a sum of $5200 at 3% simple interest for 8 years.
(8) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(9) What amount does David have to pay after 6 years if he takes a loan of $3400 at 10% simple interest?
(10) If Susan borrowed $3650 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.