Question:
What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 10% simple interest?
Correct Answer
$4875
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 10%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 5
= $3250 ×10/100 × 5
= 3250 × 10 × 5/100
= 32500 × 5/100
= 162500/100
= $1625
Thus, Simple Interest = $1625
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 + $1625
= $4875
Thus, Amount to be paid = $4875 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) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3250 + ($3250 × 10% × 5)
= $3250 + ($3250 ×10/100 × 5)
= $3250 + (3250 × 10 × 5/100)
= $3250 + (32500 × 5/100)
= $3250 + (162500/100)
= $3250 + $1625 = $4875
Thus, Amount (A) to be paid = $4875 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3250, the simple interest in 1 year
= 10/100 × 3250
= 10 × 3250/100
= 32500/100 = $325
Thus, simple interest for 1 year = $325
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $325 × 5 = $1625
Thus, Simple Interest (SI) = $1625
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1625
= $4875
Thus, Amount to be paid = $4875 Answer
Similar Questions
(1) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(2) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Karen borrowed a sum of $3950 at 9% simple interest for 3 years.
(4) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(5) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.
(6) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(7) 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.
(8) If Barbara paid $4118 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(10) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.