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) How much loan did Ashley borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7205 to clear it?
(2) Nancy had to pay $4523.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) David had to pay $3808 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Joseph had to pay $4255 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 7 years.
(7) How much loan did Sharon borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9687.5 to clear it?
(8) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.
(9) Calculate the amount due if James borrowed a sum of $3000 at 9% simple interest for 3 years.
(10) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 4% simple interest.