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 Rebecca borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8797.5 to clear it?
(2) David had to pay $3604 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 2% simple interest?
(6) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 4 years.
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 7% simple interest for 4 years.
(9) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 5% simple interest for 8 years.