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) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(2) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(3) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.
(4) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(5) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(6) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 3 years.
(8) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(9) How much loan did Donna borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8562.5 to clear it?
(10) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?