Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?
Correct Answer
$4225
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 5
= $3250 ×6/100 × 5
= 3250 × 6 × 5/100
= 19500 × 5/100
= 97500/100
= $975
Thus, Simple Interest = $975
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 + $975
= $4225
Thus, Amount to be paid = $4225 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) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 6% × 5)
= $3250 + ($3250 ×6/100 × 5)
= $3250 + (3250 × 6 × 5/100)
= $3250 + (19500 × 5/100)
= $3250 + (97500/100)
= $3250 + $975 = $4225
Thus, Amount (A) to be paid = $4225 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3250, the simple interest in 1 year
= 6/100 × 3250
= 6 × 3250/100
= 19500/100 = $195
Thus, simple interest for 1 year = $195
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $195 × 5 = $975
Thus, Simple Interest (SI) = $975
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $975
= $4225
Thus, Amount to be paid = $4225 Answer
Similar Questions
(1) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(3) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(4) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 8 years.
(6) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7020 to clear the loan, then find the time period of the loan.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?
(8) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(9) If Anthony paid $5160 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.