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) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(3) In how much time a principal of $3050 will amount to $3355 at a simple interest of 5% per annum?
(4) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(5) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(6) If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(9) How much loan did Susan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6497.5 to clear it?
(10) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8580 to clear it?