Question:
Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 8% simple interest.
Correct Answer
$9360
Solution And Explanation
Solution
Given,
Principal (P) = $5200
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) = $5200 × 8% × 10
= $5200 ×8/100 × 10
= 5200 × 8 × 10/100
= 41600 × 10/100
= 416000/100
= $4160
Thus, Simple Interest = $4160
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 = $5200 + $4160
= $9360
Thus, Amount to be paid = $9360 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 = $5200
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5200 + ($5200 × 8% × 10)
= $5200 + ($5200 ×8/100 × 10)
= $5200 + (5200 × 8 × 10/100)
= $5200 + (41600 × 10/100)
= $5200 + (416000/100)
= $5200 + $4160 = $9360
Thus, Amount (A) to be paid = $9360 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 $5200, the simple interest in 1 year
= 8/100 × 5200
= 8 × 5200/100
= 41600/100 = $416
Thus, simple interest for 1 year = $416
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $416 × 10 = $4160
Thus, Simple Interest (SI) = $4160
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5200 + $4160
= $9360
Thus, Amount to be paid = $9360 Answer
Similar Questions
(1) How much loan did Mary borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6060 to clear it?
(2) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(5) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(6) If Jessica paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(8) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?
(9) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 4% simple interest?
(10) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.