Question:
Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 7 years.
Correct Answer
$9046.5
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 9% × 7
= $5550 ×9/100 × 7
= 5550 × 9 × 7/100
= 49950 × 7/100
= 349650/100
= $3496.5
Thus, Simple Interest = $3496.5
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 = $5550 + $3496.5
= $9046.5
Thus, Amount to be paid = $9046.5 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 = $5550
Rate of Simple Interest (SI) or (R) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5550 + ($5550 × 9% × 7)
= $5550 + ($5550 ×9/100 × 7)
= $5550 + (5550 × 9 × 7/100)
= $5550 + (49950 × 7/100)
= $5550 + (349650/100)
= $5550 + $3496.5 = $9046.5
Thus, Amount (A) to be paid = $9046.5 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 $5550, the simple interest in 1 year
= 9/100 × 5550
= 9 × 5550/100
= 49950/100 = $499.5
Thus, simple interest for 1 year = $499.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $499.5 × 7 = $3496.5
Thus, Simple Interest (SI) = $3496.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3496.5
= $9046.5
Thus, Amount to be paid = $9046.5 Answer
Similar Questions
(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 5% simple interest?
(2) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(3) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 10% simple interest?
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 9% simple interest for 4 years.
(5) How much loan did Richard borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6440 to clear it?
(6) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 5% simple interest?
(7) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7964 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 4 years.
(9) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.
(10) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $10240 to clear the loan, then find the time period of the loan.