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) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 4% simple interest?
(2) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 4% simple interest?
(3) How much loan did Richard borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6440 to clear it?
(4) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $10200 to clear the loan, then find the time period of the loan.
(5) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?
(6) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(7) In how much time a principal of $3150 will amount to $3402 at a simple interest of 4% per annum?
(8) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.
(9) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(10) How much loan did Daniel borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7015 to clear it?