Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
Correct Answer
$4550
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 10%
Time (t) = 4 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% × 4
= $3250 ×10/100 × 4
= 3250 × 10 × 4/100
= 32500 × 4/100
= 130000/100
= $1300
Thus, Simple Interest = $1300
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 + $1300
= $4550
Thus, Amount to be paid = $4550 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) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 10% × 4)
= $3250 + ($3250 ×10/100 × 4)
= $3250 + (3250 × 10 × 4/100)
= $3250 + (32500 × 4/100)
= $3250 + (130000/100)
= $3250 + $1300 = $4550
Thus, Amount (A) to be paid = $4550 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 4 years
= Simple interest for 1 year × 4
= $325 × 4 = $1300
Thus, Simple Interest (SI) = $1300
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1300
= $4550
Thus, Amount to be paid = $4550 Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(2) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 8% simple interest?
(3) How much loan did Linda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6152.5 to clear it?
(4) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
(5) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 9% simple interest?
(7) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(9) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 3 years.