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) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(4) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(5) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(6) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 6% simple interest.
(8) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 3% simple interest for 4 years.
(10) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.