Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
Correct Answer
$10080
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 8% × 10
= $5600 ×8/100 × 10
= 5600 × 8 × 10/100
= 44800 × 10/100
= 448000/100
= $4480
Thus, Simple Interest = $4480
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 = $5600 + $4480
= $10080
Thus, Amount to be paid = $10080 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 = $5600
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 8% × 10)
= $5600 + ($5600 ×8/100 × 10)
= $5600 + (5600 × 8 × 10/100)
= $5600 + (44800 × 10/100)
= $5600 + (448000/100)
= $5600 + $4480 = $10080
Thus, Amount (A) to be paid = $10080 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 $5600, the simple interest in 1 year
= 8/100 × 5600
= 8 × 5600/100
= 44800/100 = $448
Thus, simple interest for 1 year = $448
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $448 × 10 = $4480
Thus, Simple Interest (SI) = $4480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $4480
= $10080
Thus, Amount to be paid = $10080 Answer
Similar Questions
(1) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 8% simple interest?
(2) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 5% simple interest?
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.
(5) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?
(8) What amount does James have to pay after 5 years if he takes a loan of $3000 at 6% simple interest?
(9) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 7 years.