Question:
Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.
Correct Answer
$9450
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 10%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 8
= $5250 ×10/100 × 8
= 5250 × 10 × 8/100
= 52500 × 8/100
= 420000/100
= $4200
Thus, Simple Interest = $4200
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 + $4200
= $9450
Thus, Amount to be paid = $9450 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) = 10%
And, Time (t) = 8 years
Thus, Amount (A)
= $5250 + ($5250 × 10% × 8)
= $5250 + ($5250 ×10/100 × 8)
= $5250 + (5250 × 10 × 8/100)
= $5250 + (52500 × 8/100)
= $5250 + (420000/100)
= $5250 + $4200 = $9450
Thus, Amount (A) to be paid = $9450 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $5250, the simple interest in 1 year
= 10/100 × 5250
= 10 × 5250/100
= 52500/100 = $525
Thus, simple interest for 1 year = $525
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $525 × 8 = $4200
Thus, Simple Interest (SI) = $4200
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $4200
= $9450
Thus, Amount to be paid = $9450 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(2) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(3) John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $7568 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 8% simple interest?
(5) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(7) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(8) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(9) If William borrowed $3500 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.