Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
Correct Answer
$9435
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 7% × 10
= $5550 ×7/100 × 10
= 5550 × 7 × 10/100
= 38850 × 10/100
= 388500/100
= $3885
Thus, Simple Interest = $3885
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 + $3885
= $9435
Thus, Amount to be paid = $9435 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) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 7% × 10)
= $5550 + ($5550 ×7/100 × 10)
= $5550 + (5550 × 7 × 10/100)
= $5550 + (38850 × 10/100)
= $5550 + (388500/100)
= $5550 + $3885 = $9435
Thus, Amount (A) to be paid = $9435 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 $5550, the simple interest in 1 year
= 7/100 × 5550
= 7 × 5550/100
= 38850/100 = $388.5
Thus, simple interest for 1 year = $388.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $388.5 × 10 = $3885
Thus, Simple Interest (SI) = $3885
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3885
= $9435
Thus, Amount to be paid = $9435 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 7 years.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 8 years.
(4) How much loan did Mary borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6060 to clear it?
(5) If Paul paid $5076 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(7) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(10) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 5% simple interest.