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) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
(2) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Christopher borrowed a sum of $4000 at 4% simple interest for 3 years.
(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.
(5) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(6) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(7) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.
(8) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8280 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.