Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 3% simple interest?
Correct Answer
$3737.5
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 3%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 5
= $3250 ×3/100 × 5
= 3250 × 3 × 5/100
= 9750 × 5/100
= 48750/100
= $487.5
Thus, Simple Interest = $487.5
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 + $487.5
= $3737.5
Thus, Amount to be paid = $3737.5 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) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 3% × 5)
= $3250 + ($3250 ×3/100 × 5)
= $3250 + (3250 × 3 × 5/100)
= $3250 + (9750 × 5/100)
= $3250 + (48750/100)
= $3250 + $487.5 = $3737.5
Thus, Amount (A) to be paid = $3737.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3250, the simple interest in 1 year
= 3/100 × 3250
= 3 × 3250/100
= 9750/100 = $97.5
Thus, simple interest for 1 year = $97.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $97.5 × 5 = $487.5
Thus, Simple Interest (SI) = $487.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $487.5
= $3737.5
Thus, Amount to be paid = $3737.5 Answer
Similar Questions
(1) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $7040 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.
(3) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 8 years.
(4) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?
(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 9% simple interest?
(6) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(7) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?
(8) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(9) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 9% simple interest?
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 4 years.