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) Find the amount to be paid if John borrowed a sum of $5200 at 2% simple interest for 8 years.
(2) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(3) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 3% simple interest for 4 years.
(5) If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due if John borrowed a sum of $3200 at 4% simple interest for 3 years.
(7) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 3 years.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?