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) 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.
(2) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(3) Mark took a loan of $6800 at the rate of 10% simple interest per annum. If he paid an amount of $12920 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 4 years.
(5) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 10% simple interest?
(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) If Robert paid $3596 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?
(9) In how much time a principal of $3200 will amount to $3680 at a simple interest of 3% per annum?
(10) If Joseph paid $3996 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.