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) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.
(3) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(4) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8493 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 7 years.
(6) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(7) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
(9) If Daniel paid $4920 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.