Question:
Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
Correct Answer
$9180
Solution And Explanation
Solution
Given,
Principal (P) = $5100
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) = $5100 × 8% × 10
= $5100 ×8/100 × 10
= 5100 × 8 × 10/100
= 40800 × 10/100
= 408000/100
= $4080
Thus, Simple Interest = $4080
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 = $5100 + $4080
= $9180
Thus, Amount to be paid = $9180 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 = $5100
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5100 + ($5100 × 8% × 10)
= $5100 + ($5100 ×8/100 × 10)
= $5100 + (5100 × 8 × 10/100)
= $5100 + (40800 × 10/100)
= $5100 + (408000/100)
= $5100 + $4080 = $9180
Thus, Amount (A) to be paid = $9180 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 $5100, the simple interest in 1 year
= 8/100 × 5100
= 8 × 5100/100
= 40800/100 = $408
Thus, simple interest for 1 year = $408
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $408 × 10 = $4080
Thus, Simple Interest (SI) = $4080
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5100 + $4080
= $9180
Thus, Amount to be paid = $9180 Answer
Similar Questions
(1) How much loan did Mark borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7360 to clear it?
(2) How much loan did Carol borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7755 to clear it?
(3) Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 3 years.
(4) How much loan did Brian borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8640 to clear it?
(5) How much loan did Ronald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8250 to clear it?
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 8 years.
(7) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
(8) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(9) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6407 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.