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) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(3) In how much time a principal of $3000 will amount to $3360 at a simple interest of 4% per annum?
(4) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6970 to clear the loan, then find the time period of the loan.
(5) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 8 years.
(8) How much loan did Mark borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7680 to clear it?
(9) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(10) If Michelle paid $5544 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.