Question:
Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
Correct Answer
$6608
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 2% × 9
= $5600 ×2/100 × 9
= 5600 × 2 × 9/100
= 11200 × 9/100
= 100800/100
= $1008
Thus, Simple Interest = $1008
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 = $5600 + $1008
= $6608
Thus, Amount to be paid = $6608 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 = $5600
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5600 + ($5600 × 2% × 9)
= $5600 + ($5600 ×2/100 × 9)
= $5600 + (5600 × 2 × 9/100)
= $5600 + (11200 × 9/100)
= $5600 + (100800/100)
= $5600 + $1008 = $6608
Thus, Amount (A) to be paid = $6608 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 $5600, the simple interest in 1 year
= 2/100 × 5600
= 2 × 5600/100
= 11200/100 = $112
Thus, simple interest for 1 year = $112
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $112 × 9 = $1008
Thus, Simple Interest (SI) = $1008
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $1008
= $6608
Thus, Amount to be paid = $6608 Answer
Similar Questions
(1) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(3) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 4 years.
(5) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(7) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $10370 to clear the loan, then find the time period of the loan.
(8) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(9) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.