Question:
Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
Correct Answer
$7888
Solution And Explanation
Solution
Given,
Principal (P) = $5800
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) = $5800 × 4% × 9
= $5800 ×4/100 × 9
= 5800 × 4 × 9/100
= 23200 × 9/100
= 208800/100
= $2088
Thus, Simple Interest = $2088
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 = $5800 + $2088
= $7888
Thus, Amount to be paid = $7888 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 = $5800
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5800 + ($5800 × 4% × 9)
= $5800 + ($5800 ×4/100 × 9)
= $5800 + (5800 × 4 × 9/100)
= $5800 + (23200 × 9/100)
= $5800 + (208800/100)
= $5800 + $2088 = $7888
Thus, Amount (A) to be paid = $7888 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 $5800, the simple interest in 1 year
= 4/100 × 5800
= 4 × 5800/100
= 23200/100 = $232
Thus, simple interest for 1 year = $232
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $232 × 9 = $2088
Thus, Simple Interest (SI) = $2088
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5800 + $2088
= $7888
Thus, Amount to be paid = $7888 Answer
Similar Questions
(1) What amount does James have to pay after 5 years if he takes a loan of $3000 at 8% simple interest?
(2) What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 8% simple interest?
(4) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8312.5 to clear it?
(5) How much loan did John borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5980 to clear it?
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 4% simple interest?
(7) In how much time a principal of $3200 will amount to $3584 at a simple interest of 3% per annum?
(8) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9142.5 to clear it?
(9) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(10) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6407 to clear the loan, then find the time period of the loan.