Question:
What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
Correct Answer
$4720
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 9%
Time (t) = 2 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) = $4000 × 9% × 2
= $4000 ×9/100 × 2
= 4000 × 9 × 2/100
= 36000 × 2/100
= 72000/100
= $720
Thus, Simple Interest = $720
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 = $4000 + $720
= $4720
Thus, Amount to be paid = $4720 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 = $4000
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 2 years
Thus, Amount (A)
= $4000 + ($4000 × 9% × 2)
= $4000 + ($4000 ×9/100 × 2)
= $4000 + (4000 × 9 × 2/100)
= $4000 + (36000 × 2/100)
= $4000 + (72000/100)
= $4000 + $720 = $4720
Thus, Amount (A) to be paid = $4720 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 $4000, the simple interest in 1 year
= 9/100 × 4000
= 9 × 4000/100
= 36000/100 = $360
Thus, simple interest for 1 year = $360
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $360 × 2 = $720
Thus, Simple Interest (SI) = $720
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $720
= $4720
Thus, Amount to be paid = $4720 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(3) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(4) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 8 years.
(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 7 years.
(7) What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.
(9) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?
(10) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?