Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 8 years.
Correct Answer
$6510
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 3%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 8
= $5250 ×3/100 × 8
= 5250 × 3 × 8/100
= 15750 × 8/100
= 126000/100
= $1260
Thus, Simple Interest = $1260
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 + $1260
= $6510
Thus, Amount to be paid = $6510 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) = 3%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 3% × 8)
= $5250 + ($5250 ×3/100 × 8)
= $5250 + (5250 × 3 × 8/100)
= $5250 + (15750 × 8/100)
= $5250 + (126000/100)
= $5250 + $1260 = $6510
Thus, Amount (A) to be paid = $6510 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5250, the simple interest in 1 year
= 3/100 × 5250
= 3 × 5250/100
= 15750/100 = $157.5
Thus, simple interest for 1 year = $157.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $157.5 × 8 = $1260
Thus, Simple Interest (SI) = $1260
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1260
= $6510
Thus, Amount to be paid = $6510 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.
(2) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 7 years.
(3) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 2% simple interest for 4 years.
(5) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 4 years.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
(7) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 3 years.
(9) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.