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 Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?
(2) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(3) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
(5) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(9) How much loan did Anthony borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7560 to clear it?
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.