Question:
Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
Correct Answer
$10545
Solution And Explanation
Solution
Given,
Principal (P) = $5550
Rate of Simple Interest (SI) = 9%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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) = $5550 × 9% × 10
= $5550 ×9/100 × 10
= 5550 × 9 × 10/100
= 49950 × 10/100
= 499500/100
= $4995
Thus, Simple Interest = $4995
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 = $5550 + $4995
= $10545
Thus, Amount to be paid = $10545 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 = $5550
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 10 years
Thus, Amount (A)
= $5550 + ($5550 × 9% × 10)
= $5550 + ($5550 ×9/100 × 10)
= $5550 + (5550 × 9 × 10/100)
= $5550 + (49950 × 10/100)
= $5550 + (499500/100)
= $5550 + $4995 = $10545
Thus, Amount (A) to be paid = $10545 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $5550, the simple interest in 1 year
= 9/100 × 5550
= 9 × 5550/100
= 49950/100 = $499.5
Thus, simple interest for 1 year = $499.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $499.5 × 10 = $4995
Thus, Simple Interest (SI) = $4995
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $4995
= $10545
Thus, Amount to be paid = $10545 Answer
Similar Questions
(1) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 4 years.
(2) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?
(3) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(4) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10452 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 7 years.
(6) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(7) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(8) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.
(9) If Susan borrowed $3650 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) What amount will be due after 2 years if James borrowed a sum of $3000 at a 9% simple interest?