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) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(2) Andrew had to pay $5376 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(5) Nancy had to pay $4523.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7872 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.
(8) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.
(9) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 3 years.
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.