Question:
Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
Correct Answer
$7208
Solution And Explanation
Solution
Given,
Principal (P) = $5300
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) = $5300 × 4% × 9
= $5300 ×4/100 × 9
= 5300 × 4 × 9/100
= 21200 × 9/100
= 190800/100
= $1908
Thus, Simple Interest = $1908
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 = $5300 + $1908
= $7208
Thus, Amount to be paid = $7208 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 = $5300
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5300 + ($5300 × 4% × 9)
= $5300 + ($5300 ×4/100 × 9)
= $5300 + (5300 × 4 × 9/100)
= $5300 + (21200 × 9/100)
= $5300 + (190800/100)
= $5300 + $1908 = $7208
Thus, Amount (A) to be paid = $7208 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 $5300, the simple interest in 1 year
= 4/100 × 5300
= 4 × 5300/100
= 21200/100 = $212
Thus, simple interest for 1 year = $212
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $212 × 9 = $1908
Thus, Simple Interest (SI) = $1908
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1908
= $7208
Thus, Amount to be paid = $7208 Answer
Similar Questions
(1) If David paid $3672 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.
(3) Kenneth had to pay $5600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $5984 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.
(6) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(7) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(8) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?
(9) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.