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) If Christopher borrowed $4000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.
(4) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?
(5) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3200 will amount to $3456 at a simple interest of 2% per annum?
(8) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 5% simple interest.
(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.