Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
Correct Answer
$4062.5
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 5%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 5
= $3250 ×5/100 × 5
= 3250 × 5 × 5/100
= 16250 × 5/100
= 81250/100
= $812.5
Thus, Simple Interest = $812.5
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 + $812.5
= $4062.5
Thus, Amount to be paid = $4062.5 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) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 5% × 5)
= $3250 + ($3250 ×5/100 × 5)
= $3250 + (3250 × 5 × 5/100)
= $3250 + (16250 × 5/100)
= $3250 + (81250/100)
= $3250 + $812.5 = $4062.5
Thus, Amount (A) to be paid = $4062.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3250, the simple interest in 1 year
= 5/100 × 3250
= 5 × 3250/100
= 16250/100 = $162.5
Thus, simple interest for 1 year = $162.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $162.5 × 5 = $812.5
Thus, Simple Interest (SI) = $812.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $812.5
= $4062.5
Thus, Amount to be paid = $4062.5 Answer
Similar Questions
(1) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(2) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
(4) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 6% simple interest?
(5) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(8) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 4% simple interest.
(10) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9048 to clear the loan, then find the time period of the loan.