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) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 8 years.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 4 years.
(3) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(5) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?
(7) How much loan did Richard borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7000 to clear it?
(8) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(10) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.