Question:
What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
Correct Answer
$5655
Solution And Explanation
Solution
Given,
Principal (P) = $3900
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) = $3900 × 9% × 5
= $3900 ×9/100 × 5
= 3900 × 9 × 5/100
= 35100 × 5/100
= 175500/100
= $1755
Thus, Simple Interest = $1755
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 = $3900 + $1755
= $5655
Thus, Amount to be paid = $5655 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 = $3900
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3900 + ($3900 × 9% × 5)
= $3900 + ($3900 ×9/100 × 5)
= $3900 + (3900 × 9 × 5/100)
= $3900 + (35100 × 5/100)
= $3900 + (175500/100)
= $3900 + $1755 = $5655
Thus, Amount (A) to be paid = $5655 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 $3900, the simple interest in 1 year
= 9/100 × 3900
= 9 × 3900/100
= 35100/100 = $351
Thus, simple interest for 1 year = $351
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $351 × 5 = $1755
Thus, Simple Interest (SI) = $1755
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3900 + $1755
= $5655
Thus, Amount to be paid = $5655 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(2) How much loan did Donald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8125 to clear it?
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 7 years.
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 4% simple interest?
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 6% simple interest?
(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(7) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(8) Mary had to pay $3507.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) John had to pay $3584 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 10% simple interest.