Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 7 years.
Correct Answer
$7455
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 6%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 7
= $5250 ×6/100 × 7
= 5250 × 6 × 7/100
= 31500 × 7/100
= 220500/100
= $2205
Thus, Simple Interest = $2205
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 + $2205
= $7455
Thus, Amount to be paid = $7455 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) = 6%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 6% × 7)
= $5250 + ($5250 ×6/100 × 7)
= $5250 + (5250 × 6 × 7/100)
= $5250 + (31500 × 7/100)
= $5250 + (220500/100)
= $5250 + $2205 = $7455
Thus, Amount (A) to be paid = $7455 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $5250, the simple interest in 1 year
= 6/100 × 5250
= 6 × 5250/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $315 × 7 = $2205
Thus, Simple Interest (SI) = $2205
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2205
= $7455
Thus, Amount to be paid = $7455 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(3) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.
(5) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.
(6) Jessica had to pay $4087.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(7) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 7% simple interest?
(8) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(9) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?
(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 7 years.