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) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 8 years.
(3) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(4) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 3% simple interest?
(5) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6267.5 to clear it?
(6) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(8) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 8% simple interest.
(9) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(10) If Karen paid $4424 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.