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) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $12240 to clear the loan, then find the time period of the loan.
(2) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $10780 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 4 years.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 8 years.
(5) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(6) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.
(7) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(8) How much loan did Barbara borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6382.5 to clear it?
(9) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3100 will amount to $3348 at a simple interest of 2% per annum?