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) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.
(2) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 3 years.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 4 years.
(6) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 4 years.
(7) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(8) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
(10) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.