Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 9% simple interest?
Correct Answer
$5005
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 9%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 6
= $3250 ×9/100 × 6
= 3250 × 9 × 6/100
= 29250 × 6/100
= 175500/100
= $1755
Thus, Simple Interest = $1755
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 + $1755
= $5005
Thus, Amount to be paid = $5005 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) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 9% × 6)
= $3250 + ($3250 ×9/100 × 6)
= $3250 + (3250 × 9 × 6/100)
= $3250 + (29250 × 6/100)
= $3250 + (175500/100)
= $3250 + $1755 = $5005
Thus, Amount (A) to be paid = $5005 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3250, the simple interest in 1 year
= 9/100 × 3250
= 9 × 3250/100
= 29250/100 = $292.5
Thus, simple interest for 1 year = $292.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $292.5 × 6 = $1755
Thus, Simple Interest (SI) = $1755
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1755
= $5005
Thus, Amount to be paid = $5005 Answer
Similar Questions
(1) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?
(2) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $8400 to clear the loan, then find the time period of the loan.
(3) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?
(4) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(5) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 8% simple interest?
(7) In how much time a principal of $3200 will amount to $4000 at a simple interest of 5% per annum?
(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(9) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.
(10) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.