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 after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(2) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 2% simple interest?
(3) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(5) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(6) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 3 years.
(10) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.