Question:
Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.
Correct Answer
$9860
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 7% × 10
= $5800 ×7/100 × 10
= 5800 × 7 × 10/100
= 40600 × 10/100
= 406000/100
= $4060
Thus, Simple Interest = $4060
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 = $5800 + $4060
= $9860
Thus, Amount to be paid = $9860 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 = $5800
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5800 + ($5800 × 7% × 10)
= $5800 + ($5800 ×7/100 × 10)
= $5800 + (5800 × 7 × 10/100)
= $5800 + (40600 × 10/100)
= $5800 + (406000/100)
= $5800 + $4060 = $9860
Thus, Amount (A) to be paid = $9860 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 $5800, the simple interest in 1 year
= 7/100 × 5800
= 7 × 5800/100
= 40600/100 = $406
Thus, simple interest for 1 year = $406
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $406 × 10 = $4060
Thus, Simple Interest (SI) = $4060
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $4060
= $9860
Thus, Amount to be paid = $9860 Answer
Similar Questions
(1) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 6% simple interest?
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 8 years.
(3) If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?
(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.
(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(7) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?
(8) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
(10) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.