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) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 7 years.
(2) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(3) Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7546 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if William borrowed a sum of $3250 at a 9% simple interest?
(5) Calculate the amount due if John borrowed a sum of $3200 at 4% simple interest for 3 years.
(6) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 4 years.
(7) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(8) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(10) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.