Question:
Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 4% simple interest.
Correct Answer
$7344
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 4% × 9
= $5400 ×4/100 × 9
= 5400 × 4 × 9/100
= 21600 × 9/100
= 194400/100
= $1944
Thus, Simple Interest = $1944
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 = $5400 + $1944
= $7344
Thus, Amount to be paid = $7344 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 = $5400
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5400 + ($5400 × 4% × 9)
= $5400 + ($5400 ×4/100 × 9)
= $5400 + (5400 × 4 × 9/100)
= $5400 + (21600 × 9/100)
= $5400 + (194400/100)
= $5400 + $1944 = $7344
Thus, Amount (A) to be paid = $7344 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 $5400, the simple interest in 1 year
= 4/100 × 5400
= 4 × 5400/100
= 21600/100 = $216
Thus, simple interest for 1 year = $216
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $216 × 9 = $1944
Thus, Simple Interest (SI) = $1944
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $1944
= $7344
Thus, Amount to be paid = $7344 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 3 years.
(2) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?
(3) Matthew took a loan of $6400 at the rate of 10% simple interest per annum. If he paid an amount of $12800 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(5) If Thomas paid $4256 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(7) What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(9) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(10) If Ashley paid $5096 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.