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) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
(4) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 8% simple interest?
(5) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 7% simple interest.
(6) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 4 years.
(8) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?
(9) Steven had to pay $4876 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.