Question:
Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 9% simple interest.
Correct Answer
$11305
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 9% × 10
= $5950 ×9/100 × 10
= 5950 × 9 × 10/100
= 53550 × 10/100
= 535500/100
= $5355
Thus, Simple Interest = $5355
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 = $5950 + $5355
= $11305
Thus, Amount to be paid = $11305 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 = $5950
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 10 years
Thus, Amount (A)
= $5950 + ($5950 × 9% × 10)
= $5950 + ($5950 ×9/100 × 10)
= $5950 + (5950 × 9 × 10/100)
= $5950 + (53550 × 10/100)
= $5950 + (535500/100)
= $5950 + $5355 = $11305
Thus, Amount (A) to be paid = $11305 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 $5950, the simple interest in 1 year
= 9/100 × 5950
= 9 × 5950/100
= 53550/100 = $535.5
Thus, simple interest for 1 year = $535.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $535.5 × 10 = $5355
Thus, Simple Interest (SI) = $5355
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $5355
= $11305
Thus, Amount to be paid = $11305 Answer
Similar Questions
(1) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) How much loan did Deborah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8195 to clear it?
(3) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(4) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(5) If Richard borrowed $3600 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) How much loan did Donna borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7535 to clear it?
(7) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 8% simple interest.
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 5% simple interest?
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 7 years.