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) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 5% simple interest.
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 9% simple interest for 4 years.
(4) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 8 years.
(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(7) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 10% simple interest for 8 years.
(9) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(10) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $10030 to clear the loan, then find the time period of the loan.