Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
Correct Answer
$4615
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 6
= $3250 ×7/100 × 6
= 3250 × 7 × 6/100
= 22750 × 6/100
= 136500/100
= $1365
Thus, Simple Interest = $1365
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 + $1365
= $4615
Thus, Amount to be paid = $4615 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 6)
= $3250 + ($3250 ×7/100 × 6)
= $3250 + (3250 × 7 × 6/100)
= $3250 + (22750 × 6/100)
= $3250 + (136500/100)
= $3250 + $1365 = $4615
Thus, Amount (A) to be paid = $4615 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $227.5 × 6 = $1365
Thus, Simple Interest (SI) = $1365
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1365
= $4615
Thus, Amount to be paid = $4615 Answer
Similar Questions
(1) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(2) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(3) How much loan did Anthony borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7560 to clear it?
(4) How much loan did Paul borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7705 to clear it?
(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 4% simple interest?
(6) If Anthony paid $5160 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(8) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(9) How much loan did Joseph borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6555 to clear it?
(10) Daniel had to pay $4469 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.