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) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9086 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(4) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?
(5) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
(7) How much loan did Ryan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9085 to clear it?
(8) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(9) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 6% simple interest for 8 years.