Question:
Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
Correct Answer
$9546
Solution And Explanation
Solution
Given,
Principal (P) = $5550
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) = $5550 × 8% × 9
= $5550 ×8/100 × 9
= 5550 × 8 × 9/100
= 44400 × 9/100
= 399600/100
= $3996
Thus, Simple Interest = $3996
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 = $5550 + $3996
= $9546
Thus, Amount to be paid = $9546 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 = $5550
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 9 years
Thus, Amount (A)
= $5550 + ($5550 × 8% × 9)
= $5550 + ($5550 ×8/100 × 9)
= $5550 + (5550 × 8 × 9/100)
= $5550 + (44400 × 9/100)
= $5550 + (399600/100)
= $5550 + $3996 = $9546
Thus, Amount (A) to be paid = $9546 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 $5550, the simple interest in 1 year
= 8/100 × 5550
= 8 × 5550/100
= 44400/100 = $444
Thus, simple interest for 1 year = $444
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $444 × 9 = $3996
Thus, Simple Interest (SI) = $3996
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5550 + $3996
= $9546
Thus, Amount to be paid = $9546 Answer
Similar Questions
(1) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(3) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(4) Betty had to pay $4760 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.
(7) In how much time a principal of $3000 will amount to $3300 at a simple interest of 5% per annum?
(8) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 8% simple interest?
(10) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $8330 to clear the loan, then find the time period of the loan.