Question:
Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
Correct Answer
$7480
Solution And Explanation
Solution
Given,
Principal (P) = $5500
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) = $5500 × 4% × 9
= $5500 ×4/100 × 9
= 5500 × 4 × 9/100
= 22000 × 9/100
= 198000/100
= $1980
Thus, Simple Interest = $1980
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 = $5500 + $1980
= $7480
Thus, Amount to be paid = $7480 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 = $5500
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5500 + ($5500 × 4% × 9)
= $5500 + ($5500 ×4/100 × 9)
= $5500 + (5500 × 4 × 9/100)
= $5500 + (22000 × 9/100)
= $5500 + (198000/100)
= $5500 + $1980 = $7480
Thus, Amount (A) to be paid = $7480 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 $5500, the simple interest in 1 year
= 4/100 × 5500
= 4 × 5500/100
= 22000/100 = $220
Thus, simple interest for 1 year = $220
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $220 × 9 = $1980
Thus, Simple Interest (SI) = $1980
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $1980
= $7480
Thus, Amount to be paid = $7480 Answer
Similar Questions
(1) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(3) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 7 years.
(4) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(6) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?
(7) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.
(10) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.