Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 2% simple interest for 3 years.
Correct Answer
$3975
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 3
= $3750 ×2/100 × 3
= 3750 × 2 × 3/100
= 7500 × 3/100
= 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) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3750 + ($3750 × 2% × 3)
= $3750 + ($3750 ×2/100 × 3)
= $3750 + (3750 × 2 × 3/100)
= $3750 + (7500 × 3/100)
= $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 = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3750, the simple interest in 1 year
= 2/100 × 3750
= 2 × 3750/100
= 7500/100 = $75
Thus, simple interest for 1 year = $75
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $75 × 3 = $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 if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.
(2) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(3) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 6% simple interest?
(4) How much loan did Patricia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6437.5 to clear it?
(5) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(6) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(7) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?
(8) If Paul paid $5452 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(9) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(10) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 8 years.