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) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
(3) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(4) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $7888 to clear the loan, then find the time period of the loan.
(5) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 2% simple interest?
(6) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.
(8) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $7752 to clear the loan, then find the time period of the loan.
(9) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(10) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.