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) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 8 years.
(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 5% simple interest?
(3) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(4) How much loan did Matthew borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7440 to clear it?
(5) How much loan did John borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5980 to clear it?
(6) In how much time a principal of $3000 will amount to $3300 at a simple interest of 2% per annum?
(7) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.
(9) What amount does William have to pay after 5 years if he takes a loan of $3500 at 8% simple interest?
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 3 years.