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) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 7 years.
(2) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 3 years.
(3) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(4) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.
(6) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 3 years.
(7) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.
(8) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $9617 to clear the loan, then find the time period of the loan.
(9) Patricia had to pay $3622.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.