Question:
Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
Correct Answer
$10800
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 10% × 10
= $5400 ×10/100 × 10
= 5400 × 10 × 10/100
= 54000 × 10/100
= 540000/100
= $5400
Thus, Simple Interest = $5400
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 = $5400 + $5400
= $10800
Thus, Amount to be paid = $10800 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 = $5400
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 10 years
Thus, Amount (A)
= $5400 + ($5400 × 10% × 10)
= $5400 + ($5400 ×10/100 × 10)
= $5400 + (5400 × 10 × 10/100)
= $5400 + (54000 × 10/100)
= $5400 + (540000/100)
= $5400 + $5400 = $10800
Thus, Amount (A) to be paid = $10800 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 $5400, the simple interest in 1 year
= 10/100 × 5400
= 10 × 5400/100
= 54000/100 = $540
Thus, simple interest for 1 year = $540
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $540 × 10 = $5400
Thus, Simple Interest (SI) = $5400
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $5400
= $10800
Thus, Amount to be paid = $10800 Answer
Similar Questions
(1) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(4) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 3 years.
(6) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
(7) Find the amount to be paid if John borrowed a sum of $5200 at 8% simple interest for 8 years.
(8) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(9) How much loan did Betty borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6875 to clear it?
(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.