Question:
What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 10% simple interest?
Correct Answer
$5200
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $3250 ×10/100 × 6
= 3250 × 10 × 6/100
= 32500 × 6/100
= 195000/100
= $1950
Thus, Simple Interest = $1950
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 + $1950
= $5200
Thus, Amount to be paid = $5200 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3250 + ($3250 × 10% × 6)
= $3250 + ($3250 ×10/100 × 6)
= $3250 + (3250 × 10 × 6/100)
= $3250 + (32500 × 6/100)
= $3250 + (195000/100)
= $3250 + $1950 = $5200
Thus, Amount (A) to be paid = $5200 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3250, the simple interest in 1 year
= 10/100 × 3250
= 10 × 3250/100
= 32500/100 = $325
Thus, simple interest for 1 year = $325
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $325 × 6 = $1950
Thus, Simple Interest (SI) = $1950
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $1950
= $5200
Thus, Amount to be paid = $5200 Answer
Similar Questions
(1) If Lisa paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?
(3) How much loan did Christopher borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6900 to clear it?
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
(5) Steven had to pay $5152 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(7) In how much time a principal of $3100 will amount to $3348 at a simple interest of 2% per annum?
(8) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.
(10) How much loan did Betty borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7187.5 to clear it?