Question:
Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 5% simple interest.
Correct Answer
$7875
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 5%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 10
= $5250 ×5/100 × 10
= 5250 × 5 × 10/100
= 26250 × 10/100
= 262500/100
= $2625
Thus, Simple Interest = $2625
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 + $2625
= $7875
Thus, Amount to be paid = $7875 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) = 5%
And, Time (t) = 10 years
Thus, Amount (A)
= $5250 + ($5250 × 5% × 10)
= $5250 + ($5250 ×5/100 × 10)
= $5250 + (5250 × 5 × 10/100)
= $5250 + (26250 × 10/100)
= $5250 + (262500/100)
= $5250 + $2625 = $7875
Thus, Amount (A) to be paid = $7875 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $5250, the simple interest in 1 year
= 5/100 × 5250
= 5 × 5250/100
= 26250/100 = $262.5
Thus, simple interest for 1 year = $262.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $262.5 × 10 = $2625
Thus, Simple Interest (SI) = $2625
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $2625
= $7875
Thus, Amount to be paid = $7875 Answer
Similar Questions
(1) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
(2) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?
(3) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 7 years.
(5) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(6) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
(7) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 7 years.
(8) If Mary paid $3660 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(10) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?