Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 4 years.
Correct Answer
$4420
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 9%
Time (t) = 4 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% × 4
= $3250 ×9/100 × 4
= 3250 × 9 × 4/100
= 29250 × 4/100
= 117000/100
= $1170
Thus, Simple Interest = $1170
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 + $1170
= $4420
Thus, Amount to be paid = $4420 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) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 9% × 4)
= $3250 + ($3250 ×9/100 × 4)
= $3250 + (3250 × 9 × 4/100)
= $3250 + (29250 × 4/100)
= $3250 + (117000/100)
= $3250 + $1170 = $4420
Thus, Amount (A) to be paid = $4420 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 4 years
= Simple interest for 1 year × 4
= $292.5 × 4 = $1170
Thus, Simple Interest (SI) = $1170
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1170
= $4420
Thus, Amount to be paid = $4420 Answer
Similar Questions
(1) What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?
(2) In how much time a principal of $3200 will amount to $3840 at a simple interest of 4% per annum?
(3) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 5% simple interest?
(4) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(5) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(7) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(8) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(9) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7647.5 to clear it?