Question:
Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.
Correct Answer
$7021
Solution And Explanation
Solution
Given,
Principal (P) = $5950
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) = $5950 × 2% × 9
= $5950 ×2/100 × 9
= 5950 × 2 × 9/100
= 11900 × 9/100
= 107100/100
= $1071
Thus, Simple Interest = $1071
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 = $5950 + $1071
= $7021
Thus, Amount to be paid = $7021 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 = $5950
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5950 + ($5950 × 2% × 9)
= $5950 + ($5950 ×2/100 × 9)
= $5950 + (5950 × 2 × 9/100)
= $5950 + (11900 × 9/100)
= $5950 + (107100/100)
= $5950 + $1071 = $7021
Thus, Amount (A) to be paid = $7021 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 $5950, the simple interest in 1 year
= 2/100 × 5950
= 2 × 5950/100
= 11900/100 = $119
Thus, simple interest for 1 year = $119
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $119 × 9 = $1071
Thus, Simple Interest (SI) = $1071
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5950 + $1071
= $7021
Thus, Amount to be paid = $7021 Answer
Similar Questions
(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(2) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(4) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(5) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(6) If Thomas paid $4256 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
(8) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.
(9) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 9% simple interest for 8 years.