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) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(2) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
(5) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(7) What amount will be due after 2 years if John borrowed a sum of $3100 at a 5% simple interest?
(8) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.
(10) If Robert borrowed $3100 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.