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) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(2) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 8% simple interest?
(3) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.
(4) Susan had to pay $3978.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.
(6) Jessica had to pay $4312.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) How much loan did Robert borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6120 to clear it?
(8) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(10) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9760 to clear the loan, then find the time period of the loan.