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) What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?
(2) Find the amount to be paid if James borrowed a sum of $5000 at 8% simple interest for 7 years.
(3) In how much time a principal of $3100 will amount to $3472 at a simple interest of 4% per annum?
(4) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 4 years.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 4 years.
(8) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 10% simple interest?
(10) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 10% simple interest?