Question:
Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 8% simple interest.
Correct Answer
$9450
Solution And Explanation
Solution
Given,
Principal (P) = $5250
Rate of Simple Interest (SI) = 8%
Time (t) = 10 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 10
= $5250 ×8/100 × 10
= 5250 × 8 × 10/100
= 42000 × 10/100
= 420000/100
= $4200
Thus, Simple Interest = $4200
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 + $4200
= $9450
Thus, Amount to be paid = $9450 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) = 8%
And, Time (t) = 10 years
Thus, Amount (A)
= $5250 + ($5250 × 8% × 10)
= $5250 + ($5250 ×8/100 × 10)
= $5250 + (5250 × 8 × 10/100)
= $5250 + (42000 × 10/100)
= $5250 + (420000/100)
= $5250 + $4200 = $9450
Thus, Amount (A) to be paid = $9450 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $5250, the simple interest in 1 year
= 8/100 × 5250
= 8 × 5250/100
= 42000/100 = $420
Thus, simple interest for 1 year = $420
Therefore, simple interest for 10 years
= Simple interest for 1 year × 10
= $420 × 10 = $4200
Thus, Simple Interest (SI) = $4200
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5250 + $4200
= $9450
Thus, Amount to be paid = $9450 Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 3 years.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 4 years.
(3) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 5% simple interest?
(4) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 7 years.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 3% simple interest for 4 years.
(6) If Patricia borrowed $3150 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(7) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(8) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.
(9) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 8% simple interest?
(10) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.