Question:
Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
Correct Answer
$6549
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 2% × 9
= $5550 ×2/100 × 9
= 5550 × 2 × 9/100
= 11100 × 9/100
= 99900/100
= $999
Thus, Simple Interest = $999
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 = $5550 + $999
= $6549
Thus, Amount to be paid = $6549 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 = $5550
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5550 + ($5550 × 2% × 9)
= $5550 + ($5550 ×2/100 × 9)
= $5550 + (5550 × 2 × 9/100)
= $5550 + (11100 × 9/100)
= $5550 + (99900/100)
= $5550 + $999 = $6549
Thus, Amount (A) to be paid = $6549 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 $5550, the simple interest in 1 year
= 2/100 × 5550
= 2 × 5550/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $111 × 9 = $999
Thus, Simple Interest (SI) = $999
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $999
= $6549
Thus, Amount to be paid = $6549 Answer
Similar Questions
(1) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(2) If Kenneth paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) How much loan did Sharon borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8912.5 to clear it?
(4) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(6) If Joseph borrowed $3700 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.
(8) Michael had to pay $3498 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?
(10) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.