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 after 10 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(2) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(4) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 3 years.
(6) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 8 years.
(8) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) If Linda paid $3886 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 8% simple interest.