Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 5% simple interest for 3 years.
Correct Answer
$3737.5
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 5%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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) = $3250 × 5% × 3
= $3250 ×5/100 × 3
= 3250 × 5 × 3/100
= 16250 × 3/100
= 48750/100
= $487.5
Thus, Simple Interest = $487.5
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 = $3250 + $487.5
= $3737.5
Thus, Amount to be paid = $3737.5 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 = $3250
Rate of Simple Interest (SI) or (R) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 5% × 3)
= $3250 + ($3250 ×5/100 × 3)
= $3250 + (3250 × 5 × 3/100)
= $3250 + (16250 × 3/100)
= $3250 + (48750/100)
= $3250 + $487.5 = $3737.5
Thus, Amount (A) to be paid = $3737.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3250, the simple interest in 1 year
= 5/100 × 3250
= 5 × 3250/100
= 16250/100 = $162.5
Thus, simple interest for 1 year = $162.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $162.5 × 3 = $487.5
Thus, Simple Interest (SI) = $487.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $487.5
= $3737.5
Thus, Amount to be paid = $3737.5 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(2) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9800 to clear the loan, then find the time period of the loan.
(3) Patricia took a loan of $4300 at the rate of 10% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(4) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(5) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.
(6) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?
(7) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
(8) How much loan did Michelle borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8340 to clear it?
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(10) Michael had to pay $3696 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.