Question:
Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
Correct Answer
$6825
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 3%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 10
= $5250 ×3/100 × 10
= 5250 × 3 × 10/100
= 15750 × 10/100
= 157500/100
= $1575
Thus, Simple Interest = $1575
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 + $1575
= $6825
Thus, Amount to be paid = $6825 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) = 3%
And, Time (t) = 10 years
Thus, Amount (A)
= $5250 + ($5250 × 3% × 10)
= $5250 + ($5250 ×3/100 × 10)
= $5250 + (5250 × 3 × 10/100)
= $5250 + (15750 × 10/100)
= $5250 + (157500/100)
= $5250 + $1575 = $6825
Thus, Amount (A) to be paid = $6825 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $5250, the simple interest in 1 year
= 3/100 × 5250
= 3 × 5250/100
= 15750/100 = $157.5
Thus, simple interest for 1 year = $157.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $157.5 × 10 = $1575
Thus, Simple Interest (SI) = $1575
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $1575
= $6825
Thus, Amount to be paid = $6825 Answer
Similar Questions
(1) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(2) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 3% simple interest.
(3) In how much time a principal of $3100 will amount to $3875 at a simple interest of 5% per annum?
(4) What amount does David have to pay after 5 years if he takes a loan of $3400 at 7% simple interest?
(5) How much loan did Paul borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7705 to clear it?
(6) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(7) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 8% simple interest?
(9) How much loan did Nancy borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7380 to clear it?
(10) How much loan did Ryan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9875 to clear it?