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) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9176 to clear the loan, then find the time period of the loan.
(2) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.
(4) How much loan did David borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6480 to clear it?
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 8% simple interest?
(6) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?
(7) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 4 years.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(10) Ashley had to pay $5232.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.