Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 3 years.
Correct Answer
$4127.5
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 9%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 3
= $3250 ×9/100 × 3
= 3250 × 9 × 3/100
= 29250 × 3/100
= 87750/100
= $877.5
Thus, Simple Interest = $877.5
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 + $877.5
= $4127.5
Thus, Amount to be paid = $4127.5 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) = 9%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 9% × 3)
= $3250 + ($3250 ×9/100 × 3)
= $3250 + (3250 × 9 × 3/100)
= $3250 + (29250 × 3/100)
= $3250 + (87750/100)
= $3250 + $877.5 = $4127.5
Thus, Amount (A) to be paid = $4127.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3250, the simple interest in 1 year
= 9/100 × 3250
= 9 × 3250/100
= 29250/100 = $292.5
Thus, simple interest for 1 year = $292.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $292.5 × 3 = $877.5
Thus, Simple Interest (SI) = $877.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $877.5
= $4127.5
Thus, Amount to be paid = $4127.5 Answer
Similar Questions
(1) How much loan did John borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6500 to clear it?
(2) Karen had to pay $4542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Emily had to pay $5035 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9248 to clear the loan, then find the time period of the loan.
(5) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(6) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(7) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.
(8) Anthony had to pay $4687 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(10) How much loan did Emily borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7425 to clear it?