Question:
Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 7 years.
Correct Answer
$8150
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 9%
Time (t) = 7 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) = $5000 × 9% × 7
= $5000 ×9/100 × 7
= 5000 × 9 × 7/100
= 45000 × 7/100
= 315000/100
= $3150
Thus, Simple Interest = $3150
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 = $5000 + $3150
= $8150
Thus, Amount to be paid = $8150 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 = $5000
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5000 + ($5000 × 9% × 7)
= $5000 + ($5000 ×9/100 × 7)
= $5000 + (5000 × 9 × 7/100)
= $5000 + (45000 × 7/100)
= $5000 + (315000/100)
= $5000 + $3150 = $8150
Thus, Amount (A) to be paid = $8150 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 $5000, the simple interest in 1 year
= 9/100 × 5000
= 9 × 5000/100
= 45000/100 = $450
Thus, simple interest for 1 year = $450
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $450 × 7 = $3150
Thus, Simple Interest (SI) = $3150
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $3150
= $8150
Thus, Amount to be paid = $8150 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(3) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?
(4) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8750 to clear it?
(5) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 3% simple interest for 7 years.
(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 5% simple interest?
(8) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(9) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(10) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.