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) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8470 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3050 will amount to $3233 at a simple interest of 3% per annum?
(3) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(4) Find the amount to be paid if David borrowed a sum of $5400 at 7% simple interest for 8 years.
(5) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 8 years.
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 4 years.
(8) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(10) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.