Question:
Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
Correct Answer
$8600
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (SI) = 8%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 9
= $5000 ×8/100 × 9
= 5000 × 8 × 9/100
= 40000 × 9/100
= 360000/100
= $3600
Thus, Simple Interest = $3600
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 + $3600
= $8600
Thus, Amount to be paid = $8600 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) = 8%
And, Time (t) = 9 years
Thus, Amount (A)
= $5000 + ($5000 × 8% × 9)
= $5000 + ($5000 ×8/100 × 9)
= $5000 + (5000 × 8 × 9/100)
= $5000 + (40000 × 9/100)
= $5000 + (360000/100)
= $5000 + $3600 = $8600
Thus, Amount (A) to be paid = $8600 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $5000, the simple interest in 1 year
= 8/100 × 5000
= 8 × 5000/100
= 40000/100 = $400
Thus, simple interest for 1 year = $400
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $400 × 9 = $3600
Thus, Simple Interest (SI) = $3600
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5000 + $3600
= $8600
Thus, Amount to be paid = $8600 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
(2) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8344 to clear the loan, then find the time period of the loan.
(3) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8688 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 8% simple interest?
(5) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(6) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(8) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(9) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 2% simple interest?
(10) In how much time a principal of $3100 will amount to $3286 at a simple interest of 3% per annum?