Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 4% simple interest?
Correct Answer
$3900
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 4%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 5
= $3250 ×4/100 × 5
= 3250 × 4 × 5/100
= 13000 × 5/100
= 65000/100
= $650
Thus, Simple Interest = $650
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 + $650
= $3900
Thus, Amount to be paid = $3900 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) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 4% × 5)
= $3250 + ($3250 ×4/100 × 5)
= $3250 + (3250 × 4 × 5/100)
= $3250 + (13000 × 5/100)
= $3250 + (65000/100)
= $3250 + $650 = $3900
Thus, Amount (A) to be paid = $3900 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3250, the simple interest in 1 year
= 4/100 × 3250
= 4 × 3250/100
= 13000/100 = $130
Thus, simple interest for 1 year = $130
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $130 × 5 = $650
Thus, Simple Interest (SI) = $650
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $650
= $3900
Thus, Amount to be paid = $3900 Answer
Similar Questions
(1) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $6622 to clear the loan, then find the time period of the loan.
(2) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(3) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 8% simple interest?
(6) 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.
(7) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.
(8) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.
(10) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?