Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.
Correct Answer
$6090
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 2%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 8
= $5250 ×2/100 × 8
= 5250 × 2 × 8/100
= 10500 × 8/100
= 84000/100
= $840
Thus, Simple Interest = $840
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 + $840
= $6090
Thus, Amount to be paid = $6090 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) = 2%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 2% × 8)
= $5250 + ($5250 ×2/100 × 8)
= $5250 + (5250 × 2 × 8/100)
= $5250 + (10500 × 8/100)
= $5250 + (84000/100)
= $5250 + $840 = $6090
Thus, Amount (A) to be paid = $6090 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5250, the simple interest in 1 year
= 2/100 × 5250
= 2 × 5250/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $105 × 8 = $840
Thus, Simple Interest (SI) = $840
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $840
= $6090
Thus, Amount to be paid = $6090 Answer
Similar Questions
(1) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?
(2) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 3 years.
(3) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.
(4) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(5) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(6) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 3 years.
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 2% simple interest?
(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.
(10) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?