Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 3 years.
Correct Answer
$4225
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 10%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 3
= $3250 ×10/100 × 3
= 3250 × 10 × 3/100
= 32500 × 3/100
= 97500/100
= $975
Thus, Simple Interest = $975
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 + $975
= $4225
Thus, Amount to be paid = $4225 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) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3250 + ($3250 × 10% × 3)
= $3250 + ($3250 ×10/100 × 3)
= $3250 + (3250 × 10 × 3/100)
= $3250 + (32500 × 3/100)
= $3250 + (97500/100)
= $3250 + $975 = $4225
Thus, Amount (A) to be paid = $4225 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3250, the simple interest in 1 year
= 10/100 × 3250
= 10 × 3250/100
= 32500/100 = $325
Thus, simple interest for 1 year = $325
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $325 × 3 = $975
Thus, Simple Interest (SI) = $975
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $975
= $4225
Thus, Amount to be paid = $4225 Answer
Similar Questions
(1) If Donald paid $5220 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8046 to clear the loan, then find the time period of the loan.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(5) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(6) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(7) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 10% simple interest?
(8) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(9) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(10) In how much time a principal of $3150 will amount to $3780 at a simple interest of 5% per annum?