Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.
Correct Answer
$6352.5
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 3%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 7
= $5250 ×3/100 × 7
= 5250 × 3 × 7/100
= 15750 × 7/100
= 110250/100
= $1102.5
Thus, Simple Interest = $1102.5
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 + $1102.5
= $6352.5
Thus, Amount to be paid = $6352.5 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) = 3%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 3% × 7)
= $5250 + ($5250 ×3/100 × 7)
= $5250 + (5250 × 3 × 7/100)
= $5250 + (15750 × 7/100)
= $5250 + (110250/100)
= $5250 + $1102.5 = $6352.5
Thus, Amount (A) to be paid = $6352.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5250, the simple interest in 1 year
= 3/100 × 5250
= 3 × 5250/100
= 15750/100 = $157.5
Thus, simple interest for 1 year = $157.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $157.5 × 7 = $1102.5
Thus, Simple Interest (SI) = $1102.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1102.5
= $6352.5
Thus, Amount to be paid = $6352.5 Answer
Similar Questions
(1) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(2) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 5% simple interest?
(3) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.
(4) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 7% simple interest?
(5) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(6) In how much time a principal of $3150 will amount to $3465 at a simple interest of 2% per annum?
(7) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $9617 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 7 years.
(9) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 8% simple interest?