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) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 6% simple interest.
(3) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
(5) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 2% simple interest for 4 years.
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.
(9) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?
(10) Karen had to pay $4542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.