Question:
Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
Correct Answer
$9630
Solution And Explanation
Solution
Given,
Principal (P) = $5350
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) = $5350 × 8% × 10
= $5350 ×8/100 × 10
= 5350 × 8 × 10/100
= 42800 × 10/100
= 428000/100
= $4280
Thus, Simple Interest = $4280
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 = $5350 + $4280
= $9630
Thus, Amount to be paid = $9630 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 = $5350
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5350 + ($5350 × 8% × 10)
= $5350 + ($5350 ×8/100 × 10)
= $5350 + (5350 × 8 × 10/100)
= $5350 + (42800 × 10/100)
= $5350 + (428000/100)
= $5350 + $4280 = $9630
Thus, Amount (A) to be paid = $9630 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 $5350, the simple interest in 1 year
= 8/100 × 5350
= 8 × 5350/100
= 42800/100 = $428
Thus, simple interest for 1 year = $428
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $428 × 10 = $4280
Thus, Simple Interest (SI) = $4280
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $4280
= $9630
Thus, Amount to be paid = $9630 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.
(2) If James paid $3360 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?
(4) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(5) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(6) Sandra had to pay $5117.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 7% simple interest.
(8) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 3% simple interest?
(10) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?