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 Robert have to pay after 5 years if he takes a loan of $3100 at 3% simple interest?
(2) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 7 years.
(4) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(5) Michelle had to pay $5395.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 10% simple interest?
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 8 years.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 6% simple interest for 3 years.
(9) How much loan did Carol borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8460 to clear it?
(10) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?