Question:
What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
Correct Answer
$5390
Solution And Explanation
Solution
Given,
Principal (P) = $3500
Rate of Simple Interest (SI) = 9%
Time (t) = 6 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) = $3500 × 9% × 6
= $3500 ×9/100 × 6
= 3500 × 9 × 6/100
= 31500 × 6/100
= 189000/100
= $1890
Thus, Simple Interest = $1890
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 = $3500 + $1890
= $5390
Thus, Amount to be paid = $5390 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 = $3500
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3500 + ($3500 × 9% × 6)
= $3500 + ($3500 ×9/100 × 6)
= $3500 + (3500 × 9 × 6/100)
= $3500 + (31500 × 6/100)
= $3500 + (189000/100)
= $3500 + $1890 = $5390
Thus, Amount (A) to be paid = $5390 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 $3500, the simple interest in 1 year
= 9/100 × 3500
= 9 × 3500/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $315 × 6 = $1890
Thus, Simple Interest (SI) = $1890
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3500 + $1890
= $5390
Thus, Amount to be paid = $5390 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.
(2) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7980 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.
(4) How much loan did Jason borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8470 to clear it?
(5) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(6) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(7) If Andrew paid $5760 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) How much loan did Joshua borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7935 to clear it?
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(10) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.