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) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(2) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3050 will amount to $3233 at a simple interest of 3% per annum?
(5) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 7 years.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(8) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(10) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?