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) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12308 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
(3) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(4) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) If Thomas paid $4104 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.
(7) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(8) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(10) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?