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) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(3) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
(4) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9060 to clear it?
(5) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.
(6) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(7) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(10) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.