Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
Correct Answer
$3575
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 2%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 5
= $3250 ×2/100 × 5
= 3250 × 2 × 5/100
= 6500 × 5/100
= 32500/100
= $325
Thus, Simple Interest = $325
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 + $325
= $3575
Thus, Amount to be paid = $3575 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) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 2% × 5)
= $3250 + ($3250 ×2/100 × 5)
= $3250 + (3250 × 2 × 5/100)
= $3250 + (6500 × 5/100)
= $3250 + (32500/100)
= $3250 + $325 = $3575
Thus, Amount (A) to be paid = $3575 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3250, the simple interest in 1 year
= 2/100 × 3250
= 2 × 3250/100
= 6500/100 = $65
Thus, simple interest for 1 year = $65
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $65 × 5 = $325
Thus, Simple Interest (SI) = $325
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $325
= $3575
Thus, Amount to be paid = $3575 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 4 years.
(2) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(3) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 3 years.
(5) How much loan did Jessica borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6325 to clear it?
(6) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.
(7) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(9) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.