Question:
Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
Correct Answer
$11200
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 10% × 10
= $5600 ×10/100 × 10
= 5600 × 10 × 10/100
= 56000 × 10/100
= 560000/100
= $5600
Thus, Simple Interest = $5600
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 = $5600 + $5600
= $11200
Thus, Amount to be paid = $11200 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 = $5600
Rate of Simple Interest (SI) or (R) = 10%
And, Time (t) = 10 years
Thus, Amount (A)
= $5600 + ($5600 × 10% × 10)
= $5600 + ($5600 ×10/100 × 10)
= $5600 + (5600 × 10 × 10/100)
= $5600 + (56000 × 10/100)
= $5600 + (560000/100)
= $5600 + $5600 = $11200
Thus, Amount (A) to be paid = $11200 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 $5600, the simple interest in 1 year
= 10/100 × 5600
= 10 × 5600/100
= 56000/100 = $560
Thus, simple interest for 1 year = $560
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $560 × 10 = $5600
Thus, Simple Interest (SI) = $5600
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $5600
= $11200
Thus, Amount to be paid = $11200 Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?
(3) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 4% simple interest?
(4) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 8 years.
(6) How much loan did Mark borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7040 to clear it?
(7) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
(8) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 7% simple interest?