Question:
Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
Correct Answer
$9095
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 7% × 10
= $5350 ×7/100 × 10
= 5350 × 7 × 10/100
= 37450 × 10/100
= 374500/100
= $3745
Thus, Simple Interest = $3745
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 = $5350 + $3745
= $9095
Thus, Amount to be paid = $9095 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 = $5350
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5350 + ($5350 × 7% × 10)
= $5350 + ($5350 ×7/100 × 10)
= $5350 + (5350 × 7 × 10/100)
= $5350 + (37450 × 10/100)
= $5350 + (374500/100)
= $5350 + $3745 = $9095
Thus, Amount (A) to be paid = $9095 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 $5350, the simple interest in 1 year
= 7/100 × 5350
= 7 × 5350/100
= 37450/100 = $374.5
Thus, simple interest for 1 year = $374.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $374.5 × 10 = $3745
Thus, Simple Interest (SI) = $3745
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $3745
= $9095
Thus, Amount to be paid = $9095 Answer
Similar Questions
(1) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 5% simple interest?
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?
(3) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(4) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?
(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.
(9) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
(10) John had to pay $3584 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.