Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 3 years.
Correct Answer
$4312.5
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 5%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 3
= $3750 ×5/100 × 3
= 3750 × 5 × 3/100
= 18750 × 3/100
= 56250/100
= $562.5
Thus, Simple Interest = $562.5
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 + $562.5
= $4312.5
Thus, Amount to be paid = $4312.5 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) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3750 + ($3750 × 5% × 3)
= $3750 + ($3750 ×5/100 × 3)
= $3750 + (3750 × 5 × 3/100)
= $3750 + (18750 × 3/100)
= $3750 + (56250/100)
= $3750 + $562.5 = $4312.5
Thus, Amount (A) to be paid = $4312.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3750, the simple interest in 1 year
= 5/100 × 3750
= 5 × 3750/100
= 18750/100 = $187.5
Thus, simple interest for 1 year = $187.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $187.5 × 3 = $562.5
Thus, Simple Interest (SI) = $562.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $562.5
= $4312.5
Thus, Amount to be paid = $4312.5 Answer
Similar Questions
(1) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(2) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 4% simple interest?
(4) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 7 years.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 9% simple interest for 8 years.
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.
(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.
(8) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.