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 Thomas borrowed a sum of $5800 at 8% simple interest for 7 years.
(2) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
(5) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(6) If Donald paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Ashley had to pay $5232.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(9) If Andrew paid $5760 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.