Question:
Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
Correct Answer
$6372
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 2% × 9
= $5400 ×2/100 × 9
= 5400 × 2 × 9/100
= 10800 × 9/100
= 97200/100
= $972
Thus, Simple Interest = $972
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 = $5400 + $972
= $6372
Thus, Amount to be paid = $6372 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 = $5400
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5400 + ($5400 × 2% × 9)
= $5400 + ($5400 ×2/100 × 9)
= $5400 + (5400 × 2 × 9/100)
= $5400 + (10800 × 9/100)
= $5400 + (97200/100)
= $5400 + $972 = $6372
Thus, Amount (A) to be paid = $6372 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 $5400, the simple interest in 1 year
= 2/100 × 5400
= 2 × 5400/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $108 × 9 = $972
Thus, Simple Interest (SI) = $972
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $972
= $6372
Thus, Amount to be paid = $6372 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(2) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?
(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(4) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.
(6) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 8 years.
(8) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 4 years.
(9) If Daniel paid $4920 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 7% simple interest.