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) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(2) Matthew had to pay $4578 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 3 years.
(5) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 2% simple interest.
(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
(7) Sandra had to pay $4984 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 7 years.
(9) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(10) Matthew had to pay $4704 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.