Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 7 years.
Correct Answer
$8925
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 10%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 7
= $5250 ×10/100 × 7
= 5250 × 10 × 7/100
= 52500 × 7/100
= 367500/100
= $3675
Thus, Simple Interest = $3675
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 + $3675
= $8925
Thus, Amount to be paid = $8925 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) = 10%
And, Time (t) = 7 years
Thus, Amount (A)
= $5250 + ($5250 × 10% × 7)
= $5250 + ($5250 ×10/100 × 7)
= $5250 + (5250 × 10 × 7/100)
= $5250 + (52500 × 7/100)
= $5250 + (367500/100)
= $5250 + $3675 = $8925
Thus, Amount (A) to be paid = $8925 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $5250, the simple interest in 1 year
= 10/100 × 5250
= 10 × 5250/100
= 52500/100 = $525
Thus, simple interest for 1 year = $525
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $525 × 7 = $3675
Thus, Simple Interest (SI) = $3675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $3675
= $8925
Thus, Amount to be paid = $8925 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 4 years.
(3) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9617 to clear the loan, then find the time period of the loan.
(4) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7790 to clear the loan, then find the time period of the loan.
(5) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(6) If Mary borrowed $3050 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(10) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?