Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 3 years.
Correct Answer
$4537.5
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3
= $3750 ×7/100 × 3
= 3750 × 7 × 3/100
= 26250 × 3/100
= 78750/100
= $787.5
Thus, Simple Interest = $787.5
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 + $787.5
= $4537.5
Thus, Amount to be paid = $4537.5 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3750 + ($3750 × 7% × 3)
= $3750 + ($3750 ×7/100 × 3)
= $3750 + (3750 × 7 × 3/100)
= $3750 + (26250 × 3/100)
= $3750 + (78750/100)
= $3750 + $787.5 = $4537.5
Thus, Amount (A) to be paid = $4537.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3750, the simple interest in 1 year
= 7/100 × 3750
= 7 × 3750/100
= 26250/100 = $262.5
Thus, simple interest for 1 year = $262.5
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $262.5 × 3 = $787.5
Thus, Simple Interest (SI) = $787.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $787.5
= $4537.5
Thus, Amount to be paid = $4537.5 Answer
Similar Questions
(1) If Michael paid $3828 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 10% simple interest?
(4) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 6% simple interest?
(5) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 3 years.
(7) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 3% simple interest.
(8) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 6% simple interest?
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 4 years.