Question:
Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
Correct Answer
$9090
Solution And Explanation
Solution
Given,
Principal (P) = $5050
Rate of Simple Interest (SI) = 8%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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) = $5050 × 8% × 10
= $5050 ×8/100 × 10
= 5050 × 8 × 10/100
= 40400 × 10/100
= 404000/100
= $4040
Thus, Simple Interest = $4040
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 = $5050 + $4040
= $9090
Thus, Amount to be paid = $9090 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 = $5050
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5050 + ($5050 × 8% × 10)
= $5050 + ($5050 ×8/100 × 10)
= $5050 + (5050 × 8 × 10/100)
= $5050 + (40400 × 10/100)
= $5050 + (404000/100)
= $5050 + $4040 = $9090
Thus, Amount (A) to be paid = $9090 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $5050, the simple interest in 1 year
= 8/100 × 5050
= 8 × 5050/100
= 40400/100 = $404
Thus, simple interest for 1 year = $404
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $404 × 10 = $4040
Thus, Simple Interest (SI) = $4040
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5050 + $4040
= $9090
Thus, Amount to be paid = $9090 Answer
Similar Questions
(1) How much loan did Betty borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6875 to clear it?
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 5% simple interest.
(3) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.
(4) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 6% simple interest?
(5) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(6) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.
(7) How much loan did Joseph borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6555 to clear it?
(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(9) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 7 years.