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) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(2) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 7 years.
(4) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9514 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.
(6) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 4 years.
(8) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 7% simple interest?
(9) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 6% simple interest?
(10) How much loan did Donald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7475 to clear it?