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) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 7 years.
(2) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 3% simple interest?
(3) Jennifer had to pay $3640 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?
(5) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Ashley had to pay $5232.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 9% simple interest?