Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 7 years.
Correct Answer
$8557.5
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 9%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 7
= $5250 ×9/100 × 7
= 5250 × 9 × 7/100
= 47250 × 7/100
= 330750/100
= $3307.5
Thus, Simple Interest = $3307.5
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 + $3307.5
= $8557.5
Thus, Amount to be paid = $8557.5 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) = 9%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 9% × 7)
= $5250 + ($5250 ×9/100 × 7)
= $5250 + (5250 × 9 × 7/100)
= $5250 + (47250 × 7/100)
= $5250 + (330750/100)
= $5250 + $3307.5 = $8557.5
Thus, Amount (A) to be paid = $8557.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $5250, the simple interest in 1 year
= 9/100 × 5250
= 9 × 5250/100
= 47250/100 = $472.5
Thus, simple interest for 1 year = $472.5
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $472.5 × 7 = $3307.5
Thus, Simple Interest (SI) = $3307.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $3307.5
= $8557.5
Thus, Amount to be paid = $8557.5 Answer
Similar Questions
(1) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 8 years.
(2) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.
(3) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(4) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(5) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(7) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 8% simple interest?
(9) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.
(10) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.