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) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 4% simple interest for 4 years.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 6% simple interest for 7 years.
(4) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
(7) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) How much loan did Ashley borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8187.5 to clear it?
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
(10) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 2% simple interest?