Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 8 years.
Correct Answer
$9030
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 9%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 8
= $5250 ×9/100 × 8
= 5250 × 9 × 8/100
= 47250 × 8/100
= 378000/100
= $3780
Thus, Simple Interest = $3780
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 + $3780
= $9030
Thus, Amount to be paid = $9030 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) = 9%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 9% × 8)
= $5250 + ($5250 ×9/100 × 8)
= $5250 + (5250 × 9 × 8/100)
= $5250 + (47250 × 8/100)
= $5250 + (378000/100)
= $5250 + $3780 = $9030
Thus, Amount (A) to be paid = $9030 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $5250, the simple interest in 1 year
= 9/100 × 5250
= 9 × 5250/100
= 47250/100 = $472.5
Thus, simple interest for 1 year = $472.5
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $472.5 × 8 = $3780
Thus, Simple Interest (SI) = $3780
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $3780
= $9030
Thus, Amount to be paid = $9030 Answer
Similar Questions
(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
(2) How much loan did Amanda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8222.5 to clear it?
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 7 years.
(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.
(5) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(6) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?
(7) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9184 to clear the loan, then find the time period of the loan.
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 2% simple interest?
(9) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(10) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.