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) How much loan did Patricia borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6180 to clear it?
(2) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 3 years.
(3) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(4) How much loan did Mary borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6312.5 to clear it?
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?
(6) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 7 years.
(8) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(9) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.
(10) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 4 years.