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) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 7 years.
(3) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.
(4) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.
(6) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(7) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 3% simple interest for 3 years.
(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 7 years.