Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.
Correct Answer
$4425
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 6%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 3
= $3750 ×6/100 × 3
= 3750 × 6 × 3/100
= 22500 × 3/100
= 67500/100
= $675
Thus, Simple Interest = $675
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 + $675
= $4425
Thus, Amount to be paid = $4425 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) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3750 + ($3750 × 6% × 3)
= $3750 + ($3750 ×6/100 × 3)
= $3750 + (3750 × 6 × 3/100)
= $3750 + (22500 × 3/100)
= $3750 + (67500/100)
= $3750 + $675 = $4425
Thus, Amount (A) to be paid = $4425 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3750, the simple interest in 1 year
= 6/100 × 3750
= 6 × 3750/100
= 22500/100 = $225
Thus, simple interest for 1 year = $225
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $225 × 3 = $675
Thus, Simple Interest (SI) = $675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $675
= $4425
Thus, Amount to be paid = $4425 Answer
Similar Questions
(1) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Patricia borrowed a sum of $5150 at 7% simple interest for 7 years.
(3) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 9% simple interest.
(4) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(5) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(7) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(9) If Andrew paid $5760 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.