Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
Correct Answer
$9520
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 7% × 10
= $5600 ×7/100 × 10
= 5600 × 7 × 10/100
= 39200 × 10/100
= 392000/100
= $3920
Thus, Simple Interest = $3920
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 = $5600 + $3920
= $9520
Thus, Amount to be paid = $9520 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 = $5600
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 7% × 10)
= $5600 + ($5600 ×7/100 × 10)
= $5600 + (5600 × 7 × 10/100)
= $5600 + (39200 × 10/100)
= $5600 + (392000/100)
= $5600 + $3920 = $9520
Thus, Amount (A) to be paid = $9520 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 $5600, the simple interest in 1 year
= 7/100 × 5600
= 7 × 5600/100
= 39200/100 = $392
Thus, simple interest for 1 year = $392
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $392 × 10 = $3920
Thus, Simple Interest (SI) = $3920
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $3920
= $9520
Thus, Amount to be paid = $9520 Answer
Similar Questions
(1) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
(4) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?
(6) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 3 years.
(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
(9) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.