Question:
Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 8% simple interest.
Correct Answer
$9540
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 8% × 10
= $5300 ×8/100 × 10
= 5300 × 8 × 10/100
= 42400 × 10/100
= 424000/100
= $4240
Thus, Simple Interest = $4240
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 = $5300 + $4240
= $9540
Thus, Amount to be paid = $9540 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 = $5300
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5300 + ($5300 × 8% × 10)
= $5300 + ($5300 ×8/100 × 10)
= $5300 + (5300 × 8 × 10/100)
= $5300 + (42400 × 10/100)
= $5300 + (424000/100)
= $5300 + $4240 = $9540
Thus, Amount (A) to be paid = $9540 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 $5300, the simple interest in 1 year
= 8/100 × 5300
= 8 × 5300/100
= 42400/100 = $424
Thus, simple interest for 1 year = $424
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $424 × 10 = $4240
Thus, Simple Interest (SI) = $4240
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $4240
= $9540
Thus, Amount to be paid = $9540 Answer
Similar Questions
(1) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
(2) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 7 years.
(3) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 6% simple interest?
(4) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?
(5) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 8% simple interest?
(6) If Matthew paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 5% simple interest?
(8) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(9) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 4 years.