Question:
Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 8 years.
Correct Answer
$9288
Solution And Explanation
Solution
Given,
Principal (P) = $5400
Rate of Simple Interest (SI) = 9%
Time (t) = 8 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% × 8
= $5400 ×9/100 × 8
= 5400 × 9 × 8/100
= 48600 × 8/100
= 388800/100
= $3888
Thus, Simple Interest = $3888
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 + $3888
= $9288
Thus, Amount to be paid = $9288 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) = 8 years
Thus, Amount (A)
= $5400 + ($5400 × 9% × 8)
= $5400 + ($5400 ×9/100 × 8)
= $5400 + (5400 × 9 × 8/100)
= $5400 + (48600 × 8/100)
= $5400 + (388800/100)
= $5400 + $3888 = $9288
Thus, Amount (A) to be paid = $9288 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 8 years
= Simple interest for 1 year × 8
= $486 × 8 = $3888
Thus, Simple Interest (SI) = $3888
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $3888
= $9288
Thus, Amount to be paid = $9288 Answer
Similar Questions
(1) Find the amount to be paid if John borrowed a sum of $5200 at 9% simple interest for 7 years.
(2) Betty had to pay $4505 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 10% simple interest?
(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 3% simple interest.
(6) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(7) What amount will be due after 2 years if David borrowed a sum of $3200 at a 4% simple interest?
(8) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3150 will amount to $3465 at a simple interest of 5% per annum?
(10) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.