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) How much loan did George borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8395 to clear it?
(2) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 7% simple interest?
(3) How much loan did Thomas borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7250 to clear it?
(4) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.
(5) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 3% simple interest for 3 years.
(6) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Mark had to pay $5060 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) What amount does William have to pay after 6 years if he takes a loan of $3500 at 8% simple interest?
(9) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.