Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
Correct Answer
$9990
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 8% × 10
= $5550 ×8/100 × 10
= 5550 × 8 × 10/100
= 44400 × 10/100
= 444000/100
= $4440
Thus, Simple Interest = $4440
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 = $5550 + $4440
= $9990
Thus, Amount to be paid = $9990 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 = $5550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 8% × 10)
= $5550 + ($5550 ×8/100 × 10)
= $5550 + (5550 × 8 × 10/100)
= $5550 + (44400 × 10/100)
= $5550 + (444000/100)
= $5550 + $4440 = $9990
Thus, Amount (A) to be paid = $9990 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 $5550, the simple interest in 1 year
= 8/100 × 5550
= 8 × 5550/100
= 44400/100 = $444
Thus, simple interest for 1 year = $444
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $444 × 10 = $4440
Thus, Simple Interest (SI) = $4440
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $4440
= $9990
Thus, Amount to be paid = $9990 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?
(3) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(4) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(6) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
(7) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 3 years.
(9) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?
(10) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.