Question:
Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
Correct Answer
$10440
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 8% × 10
= $5800 ×8/100 × 10
= 5800 × 8 × 10/100
= 46400 × 10/100
= 464000/100
= $4640
Thus, Simple Interest = $4640
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 = $5800 + $4640
= $10440
Thus, Amount to be paid = $10440 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 = $5800
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5800 + ($5800 × 8% × 10)
= $5800 + ($5800 ×8/100 × 10)
= $5800 + (5800 × 8 × 10/100)
= $5800 + (46400 × 10/100)
= $5800 + (464000/100)
= $5800 + $4640 = $10440
Thus, Amount (A) to be paid = $10440 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 $5800, the simple interest in 1 year
= 8/100 × 5800
= 8 × 5800/100
= 46400/100 = $464
Thus, simple interest for 1 year = $464
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $464 × 10 = $4640
Thus, Simple Interest (SI) = $4640
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $4640
= $10440
Thus, Amount to be paid = $10440 Answer
Similar Questions
(1) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 3 years.
(3) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.
(5) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.
(6) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(7) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?
(8) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(9) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.