Question:
Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.
Correct Answer
$10620
Solution And Explanation
Solution
Given,
Principal (P) = $5900
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) = $5900 × 8% × 10
= $5900 ×8/100 × 10
= 5900 × 8 × 10/100
= 47200 × 10/100
= 472000/100
= $4720
Thus, Simple Interest = $4720
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 = $5900 + $4720
= $10620
Thus, Amount to be paid = $10620 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 = $5900
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5900 + ($5900 × 8% × 10)
= $5900 + ($5900 ×8/100 × 10)
= $5900 + (5900 × 8 × 10/100)
= $5900 + (47200 × 10/100)
= $5900 + (472000/100)
= $5900 + $4720 = $10620
Thus, Amount (A) to be paid = $10620 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 $5900, the simple interest in 1 year
= 8/100 × 5900
= 8 × 5900/100
= 47200/100 = $472
Thus, simple interest for 1 year = $472
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $472 × 10 = $4720
Thus, Simple Interest (SI) = $4720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5900 + $4720
= $10620
Thus, Amount to be paid = $10620 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.
(2) Joshua had to pay $5488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Susan had to pay $4088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(6) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 2% simple interest?
(7) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3200 will amount to $3584 at a simple interest of 4% per annum?
(9) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(10) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?