Question:
Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
Correct Answer
$7250
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 5%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $5000 × 5% × 9
= $5000 ×5/100 × 9
= 5000 × 5 × 9/100
= 25000 × 9/100
= 225000/100
= $2250
Thus, Simple Interest = $2250
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 = $5000 + $2250
= $7250
Thus, Amount to be paid = $7250 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 = $5000
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 9 years
Thus, Amount (A)
= $5000 + ($5000 × 5% × 9)
= $5000 + ($5000 ×5/100 × 9)
= $5000 + (5000 × 5 × 9/100)
= $5000 + (25000 × 9/100)
= $5000 + (225000/100)
= $5000 + $2250 = $7250
Thus, Amount (A) to be paid = $7250 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $5000, the simple interest in 1 year
= 5/100 × 5000
= 5 × 5000/100
= 25000/100 = $250
Thus, simple interest for 1 year = $250
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $250 × 9 = $2250
Thus, Simple Interest (SI) = $2250
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $2250
= $7250
Thus, Amount to be paid = $7250 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(2) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 5% simple interest?
(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(4) How much loan did George borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8395 to clear it?
(5) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 8% simple interest?
(6) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $10164 to clear the loan, then find the time period of the loan.
(8) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 6% simple interest.
(10) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.