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) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 8% simple interest?
(2) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(3) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(4) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(5) What amount does William have to pay after 6 years if he takes a loan of $3500 at 2% simple interest?
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 8 years.
(8) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.
(9) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11765 to clear the loan, then find the time period of the loan.
(10) How much loan did David borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5940 to clear it?