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) How much loan did Betty borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7500 to clear it?
(2) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $6816 to clear the loan, then find the time period of the loan.
(3) How much loan did Emily borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8437.5 to clear it?
(4) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.
(5) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 8 years.
(7) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3050 will amount to $3233 at a simple interest of 2% per annum?
(9) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.
(10) How much loan did Jacob borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8800 to clear it?