Question:
If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
Correct Answer
$3975
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 3%
Time (t) = 2 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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) = $3750 × 3% × 2
= $3750 ×3/100 × 2
= 3750 × 3 × 2/100
= 11250 × 2/100
= 22500/100
= $225
Thus, Simple Interest = $225
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 = $3750 + $225
= $3975
Thus, Amount to be paid = $3975 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 = $3750
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 2 years
Thus, Amount (A)
= $3750 + ($3750 × 3% × 2)
= $3750 + ($3750 ×3/100 × 2)
= $3750 + (3750 × 3 × 2/100)
= $3750 + (11250 × 2/100)
= $3750 + (22500/100)
= $3750 + $225 = $3975
Thus, Amount (A) to be paid = $3975 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3750, the simple interest in 1 year
= 3/100 × 3750
= 3 × 3750/100
= 11250/100 = $112.5
Thus, simple interest for 1 year = $112.5
Therefore, simple interest for 2 years
= Simple interest for 1 year × 2
= $112.5 × 2 = $225
Thus, Simple Interest (SI) = $225
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $225
= $3975
Thus, Amount to be paid = $3975 Answer
Similar Questions
(1) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 4% simple interest?
(2) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.
(3) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?
(5) Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 3 years.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 8 years.
(7) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?
(8) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 3 years.
(10) What amount does David have to pay after 5 years if he takes a loan of $3400 at 3% simple interest?