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) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?
(2) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 9% simple interest?
(3) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 4 years.
(5) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10660 to clear the loan, then find the time period of the loan.
(6) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 8 years.
(8) If Richard paid $4176 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Susan had to pay $3869 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 8% simple interest.