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 if Robert borrowed a sum of $3100 at 10% simple interest for 4 years.
(2) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?
(3) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9500 to clear the loan, then find the time period of the loan.
(4) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 8 years.
(7) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?
(8) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(9) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
(10) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 3% simple interest?