Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 8% simple interest?
Correct Answer
$4550
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 8%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 5
= $3250 ×8/100 × 5
= 3250 × 8 × 5/100
= 26000 × 5/100
= 130000/100
= $1300
Thus, Simple Interest = $1300
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 + $1300
= $4550
Thus, Amount to be paid = $4550 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) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 5)
= $3250 + ($3250 ×8/100 × 5)
= $3250 + (3250 × 8 × 5/100)
= $3250 + (26000 × 5/100)
= $3250 + (130000/100)
= $3250 + $1300 = $4550
Thus, Amount (A) to be paid = $4550 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $260 × 5 = $1300
Thus, Simple Interest (SI) = $1300
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1300
= $4550
Thus, Amount to be paid = $4550 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(2) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(3) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 4 years.
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 2% simple interest?
(5) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 9% simple interest?
(6) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 7% simple interest?
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 2% simple interest for 3 years.
(8) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 3 years.
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.