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) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $11040 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?
(3) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $8320 to clear the loan, then find the time period of the loan.
(4) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(5) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 8 years.
(7) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $11524 to clear the loan, then find the time period of the loan.
(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(9) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
(10) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 6% simple interest?