Question:
Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
Correct Answer
$8925
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 7%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 10
= $5250 ×7/100 × 10
= 5250 × 7 × 10/100
= 36750 × 10/100
= 367500/100
= $3675
Thus, Simple Interest = $3675
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 + $3675
= $8925
Thus, Amount to be paid = $8925 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) = 7%
And, Time (t) = 10 years
Thus, Amount (A)
= $5250 + ($5250 × 7% × 10)
= $5250 + ($5250 ×7/100 × 10)
= $5250 + (5250 × 7 × 10/100)
= $5250 + (36750 × 10/100)
= $5250 + (367500/100)
= $5250 + $3675 = $8925
Thus, Amount (A) to be paid = $8925 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $5250, the simple interest in 1 year
= 7/100 × 5250
= 7 × 5250/100
= 36750/100 = $367.5
Thus, simple interest for 1 year = $367.5
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $367.5 × 10 = $3675
Thus, Simple Interest (SI) = $3675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $3675
= $8925
Thus, Amount to be paid = $8925 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(2) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?
(3) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $11730 to clear the loan, then find the time period of the loan.
(4) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(6) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(7) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.
(9) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 2% simple interest?
(10) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 8% simple interest?