Question:
Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 4 years.
Correct Answer
$5440
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (SI) = 9%
Time (t) = 4 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% × 4
= $4000 ×9/100 × 4
= 4000 × 9 × 4/100
= 36000 × 4/100
= 144000/100
= $1440
Thus, Simple Interest = $1440
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 + $1440
= $5440
Thus, Amount to be paid = $5440 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) = 4 years
Thus, Amount (A)
= $4000 + ($4000 × 9% × 4)
= $4000 + ($4000 ×9/100 × 4)
= $4000 + (4000 × 9 × 4/100)
= $4000 + (36000 × 4/100)
= $4000 + (144000/100)
= $4000 + $1440 = $5440
Thus, Amount (A) to be paid = $5440 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 4 years
= Simple interest for 1 year × 4
= $360 × 4 = $1440
Thus, Simple Interest (SI) = $1440
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $4000 + $1440
= $5440
Thus, Amount to be paid = $5440 Answer
Similar Questions
(1) Sarah had to pay $4427.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7208 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(4) How much loan did Paul borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8040 to clear it?
(5) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?
(6) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
(7) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 7% simple interest?
(9) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(10) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $12000 to clear the loan, then find the time period of the loan.