Question:
Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
Correct Answer
$9460
Solution And Explanation
Solution
Given,
Principal (P) = $5500
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) = $5500 × 8% × 9
= $5500 ×8/100 × 9
= 5500 × 8 × 9/100
= 44000 × 9/100
= 396000/100
= $3960
Thus, Simple Interest = $3960
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 = $5500 + $3960
= $9460
Thus, Amount to be paid = $9460 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 = $5500
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 9 years
Thus, Amount (A)
= $5500 + ($5500 × 8% × 9)
= $5500 + ($5500 ×8/100 × 9)
= $5500 + (5500 × 8 × 9/100)
= $5500 + (44000 × 9/100)
= $5500 + (396000/100)
= $5500 + $3960 = $9460
Thus, Amount (A) to be paid = $9460 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 $5500, the simple interest in 1 year
= 8/100 × 5500
= 8 × 5500/100
= 44000/100 = $440
Thus, simple interest for 1 year = $440
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $440 × 9 = $3960
Thus, Simple Interest (SI) = $3960
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5500 + $3960
= $9460
Thus, Amount to be paid = $9460 Answer
Similar Questions
(1) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
(3) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(4) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(5) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 3 years.
(7) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(8) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(9) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.