Question:
Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
Correct Answer
$6195
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 2%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 9
= $5250 ×2/100 × 9
= 5250 × 2 × 9/100
= 10500 × 9/100
= 94500/100
= $945
Thus, Simple Interest = $945
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 + $945
= $6195
Thus, Amount to be paid = $6195 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) = 2%
And, Time (t) = 9 years
Thus, Amount (A)
= $5250 + ($5250 × 2% × 9)
= $5250 + ($5250 ×2/100 × 9)
= $5250 + (5250 × 2 × 9/100)
= $5250 + (10500 × 9/100)
= $5250 + (94500/100)
= $5250 + $945 = $6195
Thus, Amount (A) to be paid = $6195 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $5250, the simple interest in 1 year
= 2/100 × 5250
= 2 × 5250/100
= 10500/100 = $105
Thus, simple interest for 1 year = $105
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $105 × 9 = $945
Thus, Simple Interest (SI) = $945
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $945
= $6195
Thus, Amount to be paid = $6195 Answer
Similar Questions
(1) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?
(2) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) 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.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
(5) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.
(6) What amount will be due after 2 years if John borrowed a sum of $3100 at a 8% simple interest?
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 8 years.
(8) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $12000 to clear the loan, then find the time period of the loan.
(9) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(10) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 4% simple interest?