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) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 3 years.
(3) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(5) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 9% simple interest?
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(7) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 8% simple interest for 4 years.
(9) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.
(10) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?