Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 8 years.
Correct Answer
$6930
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 4%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 8
= $5250 ×4/100 × 8
= 5250 × 4 × 8/100
= 21000 × 8/100
= 168000/100
= $1680
Thus, Simple Interest = $1680
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 + $1680
= $6930
Thus, Amount to be paid = $6930 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) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 4% × 8)
= $5250 + ($5250 ×4/100 × 8)
= $5250 + (5250 × 4 × 8/100)
= $5250 + (21000 × 8/100)
= $5250 + (168000/100)
= $5250 + $1680 = $6930
Thus, Amount (A) to be paid = $6930 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5250, the simple interest in 1 year
= 4/100 × 5250
= 4 × 5250/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $210 × 8 = $1680
Thus, Simple Interest (SI) = $1680
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1680
= $6930
Thus, Amount to be paid = $6930 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 4 years.
(3) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(4) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 10% simple interest?
(5) Patricia had to pay $3433.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?
(7) If Daniel paid $4428 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(10) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?