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) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.
(2) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(3) How much loan did Steven borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7260 to clear it?
(4) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 7% simple interest?
(5) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(6) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.
(8) David had to pay $3910 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.