Question:
What amount does David have to pay after 5 years if he takes a loan of $3400 at 9% simple interest?
Correct Answer
$4930
Solution And Explanation
Solution
Given,
Principal (P) = $3400
Rate of Simple Interest (SI) = 9%
Time (t) = 5 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) = $3400 × 9% × 5
= $3400 ×9/100 × 5
= 3400 × 9 × 5/100
= 30600 × 5/100
= 153000/100
= $1530
Thus, Simple Interest = $1530
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 = $3400 + $1530
= $4930
Thus, Amount to be paid = $4930 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 = $3400
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3400 + ($3400 × 9% × 5)
= $3400 + ($3400 ×9/100 × 5)
= $3400 + (3400 × 9 × 5/100)
= $3400 + (30600 × 5/100)
= $3400 + (153000/100)
= $3400 + $1530 = $4930
Thus, Amount (A) to be paid = $4930 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 $3400, the simple interest in 1 year
= 9/100 × 3400
= 9 × 3400/100
= 30600/100 = $306
Thus, simple interest for 1 year = $306
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $306 × 5 = $1530
Thus, Simple Interest (SI) = $1530
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3400 + $1530
= $4930
Thus, Amount to be paid = $4930 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(2) If Sarah borrowed $3850 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) If Paul paid $5640 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 2% simple interest?
(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 8 years.
(6) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 8% simple interest?
(7) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.
(8) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11403 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 8% simple interest for 8 years.