Question:
Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
Correct Answer
$7140
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 4%
Time (t) = 9 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 9
= $5250 ×4/100 × 9
= 5250 × 4 × 9/100
= 21000 × 9/100
= 189000/100
= $1890
Thus, Simple Interest = $1890
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 + $1890
= $7140
Thus, Amount to be paid = $7140 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) = 4%
And, Time (t) = 9 years
Thus, Amount (A)
= $5250 + ($5250 × 4% × 9)
= $5250 + ($5250 ×4/100 × 9)
= $5250 + (5250 × 4 × 9/100)
= $5250 + (21000 × 9/100)
= $5250 + (189000/100)
= $5250 + $1890 = $7140
Thus, Amount (A) to be paid = $7140 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5250, the simple interest in 1 year
= 4/100 × 5250
= 4 × 5250/100
= 21000/100 = $210
Thus, simple interest for 1 year = $210
Therefore, simple interest for 9 years
= Simple interest for 1 year × 9
= $210 × 9 = $1890
Thus, Simple Interest (SI) = $1890
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1890
= $7140
Thus, Amount to be paid = $7140 Answer
Similar Questions
(1) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 4 years.
(3) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7975 to clear it?
(4) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9536 to clear the loan, then find the time period of the loan.
(5) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
(7) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.
(8) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(9) If Jessica paid $4350 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) How much loan did Margaret borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6985 to clear it?