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 John borrowed a sum of $5200 at 6% simple interest for 8 years.
(2) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11403 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(4) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7661 to clear the loan, then find the time period of the loan.
(5) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(7) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 7% simple interest?
(8) 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.
(9) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.