Question:
Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
Correct Answer
$5900
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 2%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 9
= $5000 ×2/100 × 9
= 5000 × 2 × 9/100
= 10000 × 9/100
= 90000/100
= $900
Thus, Simple Interest = $900
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 + $900
= $5900
Thus, Amount to be paid = $5900 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) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5000 + ($5000 × 2% × 9)
= $5000 + ($5000 ×2/100 × 9)
= $5000 + (5000 × 2 × 9/100)
= $5000 + (10000 × 9/100)
= $5000 + (90000/100)
= $5000 + $900 = $5900
Thus, Amount (A) to be paid = $5900 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5000, the simple interest in 1 year
= 2/100 × 5000
= 2 × 5000/100
= 10000/100 = $100
Thus, simple interest for 1 year = $100
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $100 × 9 = $900
Thus, Simple Interest (SI) = $900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $900
= $5900
Thus, Amount to be paid = $5900 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.
(2) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?
(3) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 8 years.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 8 years.
(6) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?
(7) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 7 years.
(9) How much loan did Jessica borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6900 to clear it?
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.