Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?
Correct Answer
$4810
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 6
= $3250 ×8/100 × 6
= 3250 × 8 × 6/100
= 26000 × 6/100
= 156000/100
= $1560
Thus, Simple Interest = $1560
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 + $1560
= $4810
Thus, Amount to be paid = $4810 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) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 8% × 6)
= $3250 + ($3250 ×8/100 × 6)
= $3250 + (3250 × 8 × 6/100)
= $3250 + (26000 × 6/100)
= $3250 + (156000/100)
= $3250 + $1560 = $4810
Thus, Amount (A) to be paid = $4810 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3250, the simple interest in 1 year
= 8/100 × 3250
= 8 × 3250/100
= 26000/100 = $260
Thus, simple interest for 1 year = $260
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $260 × 6 = $1560
Thus, Simple Interest (SI) = $1560
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1560
= $4810
Thus, Amount to be paid = $4810 Answer
Similar Questions
(1) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
(3) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
(4) What amount will be due after 2 years if William borrowed a sum of $3250 at a 6% simple interest?
(5) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 8 years.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 8 years.
(8) How much loan did Edward borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8360 to clear it?
(9) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 8 years.
(10) In how much time a principal of $3200 will amount to $3680 at a simple interest of 3% per annum?