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) How much loan did Amanda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8580 to clear it?
(2) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(3) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) In how much time a principal of $3100 will amount to $3565 at a simple interest of 5% per annum?
(6) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(7) In how much time a principal of $3200 will amount to $3520 at a simple interest of 5% per annum?
(8) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.
(10) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.