Question:
Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 7 years.
Correct Answer
$8802
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 9% × 7
= $5400 ×9/100 × 7
= 5400 × 9 × 7/100
= 48600 × 7/100
= 340200/100
= $3402
Thus, Simple Interest = $3402
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 = $5400 + $3402
= $8802
Thus, Amount to be paid = $8802 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 = $5400
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5400 + ($5400 × 9% × 7)
= $5400 + ($5400 ×9/100 × 7)
= $5400 + (5400 × 9 × 7/100)
= $5400 + (48600 × 7/100)
= $5400 + (340200/100)
= $5400 + $3402 = $8802
Thus, Amount (A) to be paid = $8802 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 $5400, the simple interest in 1 year
= 9/100 × 5400
= 9 × 5400/100
= 48600/100 = $486
Thus, simple interest for 1 year = $486
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $486 × 7 = $3402
Thus, Simple Interest (SI) = $3402
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $3402
= $8802
Thus, Amount to be paid = $8802 Answer
Similar Questions
(1) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(4) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $6528 to clear the loan, then find the time period of the loan.
(5) 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.
(6) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 7 years.
(9) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?
(10) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.