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) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(2) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?
(4) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(7) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 5% simple interest?
(9) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.