Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 3 years.
Correct Answer
$3932.5
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3
= $3250 ×7/100 × 3
= 3250 × 7 × 3/100
= 22750 × 3/100
= 68250/100
= $682.5
Thus, Simple Interest = $682.5
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 + $682.5
= $3932.5
Thus, Amount to be paid = $3932.5 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 3)
= $3250 + ($3250 ×7/100 × 3)
= $3250 + (3250 × 7 × 3/100)
= $3250 + (22750 × 3/100)
= $3250 + (68250/100)
= $3250 + $682.5 = $3932.5
Thus, Amount (A) to be paid = $3932.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $227.5 × 3 = $682.5
Thus, Simple Interest (SI) = $682.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $682.5
= $3932.5
Thus, Amount to be paid = $3932.5 Answer
Similar Questions
(1) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(3) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(4) If Jennifer paid $3510 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(6) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 3 years.
(8) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?
(9) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 3 years.
(10) How much loan did Betty borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6875 to clear it?