Question:
Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.
Correct Answer
$9288
Solution And Explanation
Solution
Given,
Principal (P) = $5400
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) = $5400 × 8% × 9
= $5400 ×8/100 × 9
= 5400 × 8 × 9/100
= 43200 × 9/100
= 388800/100
= $3888
Thus, Simple Interest = $3888
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 = $5400 + $3888
= $9288
Thus, Amount to be paid = $9288 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 = $5400
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 9 years
Thus, Amount (A)
= $5400 + ($5400 × 8% × 9)
= $5400 + ($5400 ×8/100 × 9)
= $5400 + (5400 × 8 × 9/100)
= $5400 + (43200 × 9/100)
= $5400 + (388800/100)
= $5400 + $3888 = $9288
Thus, Amount (A) to be paid = $9288 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 $5400, the simple interest in 1 year
= 8/100 × 5400
= 8 × 5400/100
= 43200/100 = $432
Thus, simple interest for 1 year = $432
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $432 × 9 = $3888
Thus, Simple Interest (SI) = $3888
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5400 + $3888
= $9288
Thus, Amount to be paid = $9288 Answer
Similar Questions
(1) Steven had to pay $4876 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
(3) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(4) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 9% simple interest.
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?
(6) How much loan did George borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8395 to clear it?
(7) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
(8) What amount does William have to pay after 6 years if he takes a loan of $3500 at 3% simple interest?
(9) 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.
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.