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) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.
(3) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(4) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(7) Richard had to pay $3924 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
(10) In how much time a principal of $3000 will amount to $3180 at a simple interest of 3% per annum?