Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?
Correct Answer
$4387.5
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 7%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 5
= $3250 ×7/100 × 5
= 3250 × 7 × 5/100
= 22750 × 5/100
= 113750/100
= $1137.5
Thus, Simple Interest = $1137.5
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 + $1137.5
= $4387.5
Thus, Amount to be paid = $4387.5 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) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 5)
= $3250 + ($3250 ×7/100 × 5)
= $3250 + (3250 × 7 × 5/100)
= $3250 + (22750 × 5/100)
= $3250 + (113750/100)
= $3250 + $1137.5 = $4387.5
Thus, Amount (A) to be paid = $4387.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $227.5 × 5 = $1137.5
Thus, Simple Interest (SI) = $1137.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1137.5
= $4387.5
Thus, Amount to be paid = $4387.5 Answer
Similar Questions
(1) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 4 years.
(4) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 9% simple interest?
(6) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(7) If William paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9900 to clear the loan, then find the time period of the loan.
(9) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
(10) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.