Question:
Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 4% simple interest.
Correct Answer
$7548
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 4% × 9
= $5550 ×4/100 × 9
= 5550 × 4 × 9/100
= 22200 × 9/100
= 199800/100
= $1998
Thus, Simple Interest = $1998
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 = $5550 + $1998
= $7548
Thus, Amount to be paid = $7548 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 = $5550
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5550 + ($5550 × 4% × 9)
= $5550 + ($5550 ×4/100 × 9)
= $5550 + (5550 × 4 × 9/100)
= $5550 + (22200 × 9/100)
= $5550 + (199800/100)
= $5550 + $1998 = $7548
Thus, Amount (A) to be paid = $7548 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 $5550, the simple interest in 1 year
= 4/100 × 5550
= 4 × 5550/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $222 × 9 = $1998
Thus, Simple Interest (SI) = $1998
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $1998
= $7548
Thus, Amount to be paid = $7548 Answer
Similar Questions
(1) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 4 years.
(3) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(5) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9437.5 to clear it?
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 4 years.
(7) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8046 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(9) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(10) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?