Question:
What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
Correct Answer
$5220
Solution And Explanation
Solution
Given,
Principal (P) = $3600
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) = $3600 × 9% × 5
= $3600 ×9/100 × 5
= 3600 × 9 × 5/100
= 32400 × 5/100
= 162000/100
= $1620
Thus, Simple Interest = $1620
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 = $3600 + $1620
= $5220
Thus, Amount to be paid = $5220 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 = $3600
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3600 + ($3600 × 9% × 5)
= $3600 + ($3600 ×9/100 × 5)
= $3600 + (3600 × 9 × 5/100)
= $3600 + (32400 × 5/100)
= $3600 + (162000/100)
= $3600 + $1620 = $5220
Thus, Amount (A) to be paid = $5220 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 $3600, the simple interest in 1 year
= 9/100 × 3600
= 9 × 3600/100
= 32400/100 = $324
Thus, simple interest for 1 year = $324
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $324 × 5 = $1620
Thus, Simple Interest (SI) = $1620
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $1620
= $5220
Thus, Amount to be paid = $5220 Answer
Similar Questions
(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 8% simple interest?
(2) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 3% simple interest?
(3) Jennifer had to pay $3737.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?
(5) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7252 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.
(7) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 3 years.
(10) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.