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) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 5% simple interest?
(2) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(4) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 3 years.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 8 years.
(7) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 10% simple interest?
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(10) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.