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) Jessica had to pay $3975 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(3) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.
(4) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(5) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(6) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 7% simple interest?
(8) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(9) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.