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) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.
(2) How much loan did Deborah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9312.5 to clear it?
(3) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
(4) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?
(5) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(8) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?
(10) If Joseph paid $4292 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.