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) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.
(3) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(4) Betty had to pay $4760 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(6) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(7) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(10) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 4 years.