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) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(2) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(3) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(6) How much loan did Thomas borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6670 to clear it?
(7) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 8 years.
(8) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 10% simple interest?
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.