Question:
Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
Correct Answer
$7616
Solution And Explanation
Solution
Given,
Principal (P) = $5600
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) = $5600 × 4% × 9
= $5600 ×4/100 × 9
= 5600 × 4 × 9/100
= 22400 × 9/100
= 201600/100
= $2016
Thus, Simple Interest = $2016
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 = $5600 + $2016
= $7616
Thus, Amount to be paid = $7616 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 = $5600
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5600 + ($5600 × 4% × 9)
= $5600 + ($5600 ×4/100 × 9)
= $5600 + (5600 × 4 × 9/100)
= $5600 + (22400 × 9/100)
= $5600 + (201600/100)
= $5600 + $2016 = $7616
Thus, Amount (A) to be paid = $7616 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 $5600, the simple interest in 1 year
= 4/100 × 5600
= 4 × 5600/100
= 22400/100 = $224
Thus, simple interest for 1 year = $224
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $224 × 9 = $2016
Thus, Simple Interest (SI) = $2016
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5600 + $2016
= $7616
Thus, Amount to be paid = $7616 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 $9180 to clear the loan, then find the time period of the loan.
(2) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.
(4) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) If Daniel paid $4920 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(7) In how much time a principal of $3050 will amount to $3416 at a simple interest of 3% per annum?
(8) How much loan did Jessica borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7187.5 to clear it?
(9) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.
(10) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.