Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 8 years.
Correct Answer
$7770
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 6%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 8
= $5250 ×6/100 × 8
= 5250 × 6 × 8/100
= 31500 × 8/100
= 252000/100
= $2520
Thus, Simple Interest = $2520
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 + $2520
= $7770
Thus, Amount to be paid = $7770 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) = 6%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 6% × 8)
= $5250 + ($5250 ×6/100 × 8)
= $5250 + (5250 × 6 × 8/100)
= $5250 + (31500 × 8/100)
= $5250 + (252000/100)
= $5250 + $2520 = $7770
Thus, Amount (A) to be paid = $7770 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $5250, the simple interest in 1 year
= 6/100 × 5250
= 6 × 5250/100
= 31500/100 = $315
Thus, simple interest for 1 year = $315
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $315 × 8 = $2520
Thus, Simple Interest (SI) = $2520
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2520
= $7770
Thus, Amount to be paid = $7770 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.
(2) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 7% simple interest for 7 years.
(4) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 2% simple interest.
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
(6) How much loan did Sarah borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6727.5 to clear it?
(7) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 7% simple interest for 7 years.
(9) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8970 to clear it?
(10) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 5% simple interest?