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 will be due after 2 years if Mark borrowed a sum of $3700 at a 5% simple interest?
(2) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.
(3) Find the amount to be paid if David borrowed a sum of $5400 at 3% simple interest for 8 years.
(4) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 9% simple interest?
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 7 years.
(6) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $13200 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 4% simple interest for 3 years.
(8) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(9) Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 8 years.
(10) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?