Question:
Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
Correct Answer
$10000
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 10%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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) = $5000 × 10% × 10
= $5000 ×10/100 × 10
= 5000 × 10 × 10/100
= 50000 × 10/100
= 500000/100
= $5000
Thus, Simple Interest = $5000
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 = $5000 + $5000
= $10000
Thus, Amount to be paid = $10000 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 = $5000
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 10 years
Thus, Amount (A)
= $5000 + ($5000 × 10% × 10)
= $5000 + ($5000 ×10/100 × 10)
= $5000 + (5000 × 10 × 10/100)
= $5000 + (50000 × 10/100)
= $5000 + (500000/100)
= $5000 + $5000 = $10000
Thus, Amount (A) to be paid = $10000 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $5000, the simple interest in 1 year
= 10/100 × 5000
= 10 × 5000/100
= 50000/100 = $500
Thus, simple interest for 1 year = $500
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $500 × 10 = $5000
Thus, Simple Interest (SI) = $5000
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $5000
= $10000
Thus, Amount to be paid = $10000 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
(2) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 4% simple interest?
(3) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9248 to clear the loan, then find the time period of the loan.
(4) If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) How much loan did Steven borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7920 to clear it?
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 8 years.
(7) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(8) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(9) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?
(10) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.