Question:
Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 7% simple interest.
Correct Answer
$8150
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 7%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 9
= $5000 ×7/100 × 9
= 5000 × 7 × 9/100
= 35000 × 9/100
= 315000/100
= $3150
Thus, Simple Interest = $3150
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 + $3150
= $8150
Thus, Amount to be paid = $8150 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) = 7%
And, Time (t) = 9 years
Thus, Amount (A)
= $5000 + ($5000 × 7% × 9)
= $5000 + ($5000 ×7/100 × 9)
= $5000 + (5000 × 7 × 9/100)
= $5000 + (35000 × 9/100)
= $5000 + (315000/100)
= $5000 + $3150 = $8150
Thus, Amount (A) to be paid = $8150 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5000, the simple interest in 1 year
= 7/100 × 5000
= 7 × 5000/100
= 35000/100 = $350
Thus, simple interest for 1 year = $350
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $350 × 9 = $3150
Thus, Simple Interest (SI) = $3150
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $3150
= $8150
Thus, Amount to be paid = $8150 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(2) If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
(4) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(6) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
(8) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 8% simple interest?
(9) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 8 years.