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) If Christopher borrowed $4000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(3) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7216 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(6) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 6% simple interest?
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?
(8) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?
(9) 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.
(10) How much loan did Mark borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7680 to clear it?