Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 8% simple interest for 4 years.
Correct Answer
$4290
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 4
= $3250 ×8/100 × 4
= 3250 × 8 × 4/100
= 26000 × 4/100
= 104000/100
= $1040
Thus, Simple Interest = $1040
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 + $1040
= $4290
Thus, Amount to be paid = $4290 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) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 4)
= $3250 + ($3250 ×8/100 × 4)
= $3250 + (3250 × 8 × 4/100)
= $3250 + (26000 × 4/100)
= $3250 + (104000/100)
= $3250 + $1040 = $4290
Thus, Amount (A) to be paid = $4290 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $260 × 4 = $1040
Thus, Simple Interest (SI) = $1040
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1040
= $4290
Thus, Amount to be paid = $4290 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.
(2) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 6% simple interest?
(3) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(4) How much loan did Paul borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7705 to clear it?
(5) 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.
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 6% simple interest.
(7) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 6% simple interest?
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.
(10) Christopher had to pay $4360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.