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) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(2) If Daniel paid $4920 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 9% simple interest?
(7) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 8 years.
(9) Margaret had to pay $4611 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?