Question:
Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
Correct Answer
$7350
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 4%
Time (t) = 10 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% × 10
= $5250 ×4/100 × 10
= 5250 × 4 × 10/100
= 21000 × 10/100
= 210000/100
= $2100
Thus, Simple Interest = $2100
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 + $2100
= $7350
Thus, Amount to be paid = $7350 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) = 10 years
Thus, Amount (A)
= $5250 + ($5250 × 4% × 10)
= $5250 + ($5250 ×4/100 × 10)
= $5250 + (5250 × 4 × 10/100)
= $5250 + (21000 × 10/100)
= $5250 + (210000/100)
= $5250 + $2100 = $7350
Thus, Amount (A) to be paid = $7350 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 10 years
= Simple interest for 1 year × 10
= $210 × 10 = $2100
Thus, Simple Interest (SI) = $2100
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2100
= $7350
Thus, Amount to be paid = $7350 Answer
Similar Questions
(1) Calculate the amount due if Charles borrowed a sum of $3900 at 10% simple interest for 4 years.
(2) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(3) Christopher had to pay $4240 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 5% simple interest?
(5) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.
(6) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(7) Daniel had to pay $4346 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(9) Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(10) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.