Question:
Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
Correct Answer
$6254
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 2% × 9
= $5300 ×2/100 × 9
= 5300 × 2 × 9/100
= 10600 × 9/100
= 95400/100
= $954
Thus, Simple Interest = $954
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 = $5300 + $954
= $6254
Thus, Amount to be paid = $6254 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 = $5300
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5300 + ($5300 × 2% × 9)
= $5300 + ($5300 ×2/100 × 9)
= $5300 + (5300 × 2 × 9/100)
= $5300 + (10600 × 9/100)
= $5300 + (95400/100)
= $5300 + $954 = $6254
Thus, Amount (A) to be paid = $6254 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 $5300, the simple interest in 1 year
= 2/100 × 5300
= 2 × 5300/100
= 10600/100 = $106
Thus, simple interest for 1 year = $106
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $106 × 9 = $954
Thus, Simple Interest (SI) = $954
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $954
= $6254
Thus, Amount to be paid = $6254 Answer
Similar Questions
(1) If John paid $3456 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(3) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(4) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(5) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(6) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(8) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(9) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?