Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?
Correct Answer
$4225
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 6
= $3250 ×5/100 × 6
= 3250 × 5 × 6/100
= 16250 × 6/100
= 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 5% × 6)
= $3250 + ($3250 ×5/100 × 6)
= $3250 + (3250 × 5 × 6/100)
= $3250 + (16250 × 6/100)
= $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 = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3250, the simple interest in 1 year
= 5/100 × 3250
= 5 × 3250/100
= 16250/100 = $162.5
Thus, simple interest for 1 year = $162.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $162.5 × 6 = $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) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 8 years.
(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(3) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(4) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?
(5) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(6) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
(8) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.