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) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 6% simple interest?
(2) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(3) What amount does David have to pay after 5 years if he takes a loan of $3400 at 8% simple interest?
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 4 years.
(5) If Donald paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $8100 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(8) In how much time a principal of $3000 will amount to $3360 at a simple interest of 3% per annum?
(9) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) In how much time a principal of $3150 will amount to $3937.5 at a simple interest of 5% per annum?