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) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(2) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3100 will amount to $3472 at a simple interest of 3% per annum?
(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(5) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(6) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(7) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(8) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 5% simple interest?
(9) Matthew had to pay $4452 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.