Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 7 years.
Correct Answer
$5985
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 2%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $5250 × 2% × 7
= $5250 ×2/100 × 7
= 5250 × 2 × 7/100
= 10500 × 7/100
= 73500/100
= $735
Thus, Simple Interest = $735
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 = $5250 + $735
= $5985
Thus, Amount to be paid = $5985 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 = $5250
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 2% × 7)
= $5250 + ($5250 ×2/100 × 7)
= $5250 + (5250 × 2 × 7/100)
= $5250 + (10500 × 7/100)
= $5250 + (73500/100)
= $5250 + $735 = $5985
Thus, Amount (A) to be paid = $5985 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5250, the simple interest in 1 year
= 2/100 × 5250
= 2 × 5250/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $105 × 7 = $735
Thus, Simple Interest (SI) = $735
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $735
= $5985
Thus, Amount to be paid = $5985 Answer
Similar Questions
(1) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 7 years.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.
(5) In how much time a principal of $3000 will amount to $3240 at a simple interest of 4% per annum?
(6) How much loan did Daniel borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7625 to clear it?
(7) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 3% simple interest?
(10) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.