Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 7 years.
Correct Answer
$6720
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 4%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 7
= $5250 ×4/100 × 7
= 5250 × 4 × 7/100
= 21000 × 7/100
= 147000/100
= $1470
Thus, Simple Interest = $1470
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 + $1470
= $6720
Thus, Amount to be paid = $6720 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) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 4% × 7)
= $5250 + ($5250 ×4/100 × 7)
= $5250 + (5250 × 4 × 7/100)
= $5250 + (21000 × 7/100)
= $5250 + (147000/100)
= $5250 + $1470 = $6720
Thus, Amount (A) to be paid = $6720 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5250, the simple interest in 1 year
= 4/100 × 5250
= 4 × 5250/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $210 × 7 = $1470
Thus, Simple Interest (SI) = $1470
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1470
= $6720
Thus, Amount to be paid = $6720 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(3) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 4 years.
(4) How much loan did Daniel borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7320 to clear it?
(5) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) How much loan did Joseph borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6270 to clear it?
(7) If Nancy paid $4648 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 8 years.