Question:
Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.
Correct Answer
$11900
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 10% × 10
= $5950 ×10/100 × 10
= 5950 × 10 × 10/100
= 59500 × 10/100
= 595000/100
= $5950
Thus, Simple Interest = $5950
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 + $5950
= $11900
Thus, Amount to be paid = $11900 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) = 10%
And, Time (t) = 10 years
Thus, Amount (A)
= $5950 + ($5950 × 10% × 10)
= $5950 + ($5950 ×10/100 × 10)
= $5950 + (5950 × 10 × 10/100)
= $5950 + (59500 × 10/100)
= $5950 + (595000/100)
= $5950 + $5950 = $11900
Thus, Amount (A) to be paid = $11900 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 $5950, the simple interest in 1 year
= 10/100 × 5950
= 10 × 5950/100
= 59500/100 = $595
Thus, simple interest for 1 year = $595
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $595 × 10 = $5950
Thus, Simple Interest (SI) = $5950
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $5950
= $11900
Thus, Amount to be paid = $11900 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $6400 to clear the loan, then find the time period of the loan.
(2) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?
(3) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(5) How much loan did Richard borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6720 to clear it?
(6) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 3 years.
(8) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(9) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?
(10) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.