Question:
Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
Correct Answer
$6300
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 2%
Time (t) = 10 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% × 10
= $5250 ×2/100 × 10
= 5250 × 2 × 10/100
= 10500 × 10/100
= 105000/100
= $1050
Thus, Simple Interest = $1050
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 + $1050
= $6300
Thus, Amount to be paid = $6300 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) = 10 years
Thus, Amount (A)
= $5250 + ($5250 × 2% × 10)
= $5250 + ($5250 ×2/100 × 10)
= $5250 + (5250 × 2 × 10/100)
= $5250 + (10500 × 10/100)
= $5250 + (105000/100)
= $5250 + $1050 = $6300
Thus, Amount (A) to be paid = $6300 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 10 years
= Simple interest for 1 year × 10
= $105 × 10 = $1050
Thus, Simple Interest (SI) = $1050
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1050
= $6300
Thus, Amount to be paid = $6300 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if James borrowed a sum of $5000 at 9% simple interest for 8 years.
(3) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 3 years.
(4) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(5) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.
(6) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 9% simple interest.
(7) 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.
(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(9) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?
(10) How much loan did Daniel borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6710 to clear it?