Question:
Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 7 years.
Correct Answer
$8965
Solution And Explanation
Solution
Given,
Principal (P) = $5500
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) = $5500 × 9% × 7
= $5500 ×9/100 × 7
= 5500 × 9 × 7/100
= 49500 × 7/100
= 346500/100
= $3465
Thus, Simple Interest = $3465
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 = $5500 + $3465
= $8965
Thus, Amount to be paid = $8965 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 = $5500
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5500 + ($5500 × 9% × 7)
= $5500 + ($5500 ×9/100 × 7)
= $5500 + (5500 × 9 × 7/100)
= $5500 + (49500 × 7/100)
= $5500 + (346500/100)
= $5500 + $3465 = $8965
Thus, Amount (A) to be paid = $8965 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 $5500, the simple interest in 1 year
= 9/100 × 5500
= 9 × 5500/100
= 49500/100 = $495
Thus, simple interest for 1 year = $495
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $495 × 7 = $3465
Thus, Simple Interest (SI) = $3465
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $3465
= $8965
Thus, Amount to be paid = $8965 Answer
Similar Questions
(1) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 4 years.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.
(5) Betty had to pay $4887.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 4% simple interest.
(7) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 3 years.
(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(9) How much loan did Anthony borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7560 to clear it?
(10) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.