Question:
Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
Correct Answer
$6800
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 4%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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) = $5000 × 4% × 9
= $5000 ×4/100 × 9
= 5000 × 4 × 9/100
= 20000 × 9/100
= 180000/100
= $1800
Thus, Simple Interest = $1800
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 = $5000 + $1800
= $6800
Thus, Amount to be paid = $6800 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 = $5000
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5000 + ($5000 × 4% × 9)
= $5000 + ($5000 ×4/100 × 9)
= $5000 + (5000 × 4 × 9/100)
= $5000 + (20000 × 9/100)
= $5000 + (180000/100)
= $5000 + $1800 = $6800
Thus, Amount (A) to be paid = $6800 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5000, the simple interest in 1 year
= 4/100 × 5000
= 4 × 5000/100
= 20000/100 = $200
Thus, simple interest for 1 year = $200
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $200 × 9 = $1800
Thus, Simple Interest (SI) = $1800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $1800
= $6800
Thus, Amount to be paid = $6800 Answer
Similar Questions
(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 8 years.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 8% simple interest?
(3) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
(4) If Joshua paid $5880 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 6% simple interest?
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(7) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?
(8) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 4% simple interest?
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(10) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.