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) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11800 to clear the loan, then find the time period of the loan.
(2) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(3) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?
(5) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(7) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.