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) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 4 years.
(2) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 2% simple interest?
(3) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?
(5) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 4 years.
(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 8% simple interest?
(7) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
(10) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.