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) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.
(3) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 4 years.
(4) Lisa had to pay $4414.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.
(6) How much loan did Anthony borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6930 to clear it?
(7) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 9% simple interest?
(8) What amount does David have to pay after 5 years if he takes a loan of $3400 at 9% simple interest?
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(10) If Thomas borrowed $3800 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.