Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 7 years.
Correct Answer
$8190
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 8%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 7
= $5250 ×8/100 × 7
= 5250 × 8 × 7/100
= 42000 × 7/100
= 294000/100
= $2940
Thus, Simple Interest = $2940
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 + $2940
= $8190
Thus, Amount to be paid = $8190 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) = 8%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 8% × 7)
= $5250 + ($5250 ×8/100 × 7)
= $5250 + (5250 × 8 × 7/100)
= $5250 + (42000 × 7/100)
= $5250 + (294000/100)
= $5250 + $2940 = $8190
Thus, Amount (A) to be paid = $8190 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $5250, the simple interest in 1 year
= 8/100 × 5250
= 8 × 5250/100
= 42000/100 = $420
Thus, simple interest for 1 year = $420
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $420 × 7 = $2940
Thus, Simple Interest (SI) = $2940
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2940
= $8190
Thus, Amount to be paid = $8190 Answer
Similar Questions
(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 3 years.
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 4 years.
(3) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.
(4) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8745 to clear it?
(5) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $5822 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(7) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(8) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.