Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 8 years.
Correct Answer
$8190
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 7%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 8
= $5250 ×7/100 × 8
= 5250 × 7 × 8/100
= 36750 × 8/100
= 294000/100
= $2940
Thus, Simple Interest = $2940
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 + $2940
= $8190
Thus, Amount to be paid = $8190 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) = 7%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 7% × 8)
= $5250 + ($5250 ×7/100 × 8)
= $5250 + (5250 × 7 × 8/100)
= $5250 + (36750 × 8/100)
= $5250 + (294000/100)
= $5250 + $2940 = $8190
Thus, Amount (A) to be paid = $8190 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5250, the simple interest in 1 year
= 7/100 × 5250
= 7 × 5250/100
= 36750/100 = $367.5
Thus, simple interest for 1 year = $367.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $367.5 × 8 = $2940
Thus, Simple Interest (SI) = $2940
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2940
= $8190
Thus, Amount to be paid = $8190 Answer
Similar Questions
(1) What amount will be due after 2 years if John borrowed a sum of $3100 at a 8% simple interest?
(2) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?
(4) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.
(5) Donna had to pay $5432 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.
(8) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(9) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(10) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.