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) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.
(3) If Donald paid $5040 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) How much loan did Melissa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8820 to clear it?
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(7) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 10% simple interest?
(9) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 3% simple interest?
(10) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.