Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 8 years.
Correct Answer
$7350
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 5%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 8
= $5250 ×5/100 × 8
= 5250 × 5 × 8/100
= 26250 × 8/100
= 210000/100
= $2100
Thus, Simple Interest = $2100
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 + $2100
= $7350
Thus, Amount to be paid = $7350 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) = 5%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 5% × 8)
= $5250 + ($5250 ×5/100 × 8)
= $5250 + (5250 × 5 × 8/100)
= $5250 + (26250 × 8/100)
= $5250 + (210000/100)
= $5250 + $2100 = $7350
Thus, Amount (A) to be paid = $7350 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $5250, the simple interest in 1 year
= 5/100 × 5250
= 5 × 5250/100
= 26250/100 = $262.5
Thus, simple interest for 1 year = $262.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $262.5 × 8 = $2100
Thus, Simple Interest (SI) = $2100
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2100
= $7350
Thus, Amount to be paid = $7350 Answer
Similar Questions
(1) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 7% simple interest.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 8% simple interest?
(4) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(5) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(6) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 4% simple interest?
(8) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?
(9) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.
(10) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.