Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 3 years.
Correct Answer
$4650
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 8%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 3
= $3750 ×8/100 × 3
= 3750 × 8 × 3/100
= 30000 × 3/100
= 90000/100
= $900
Thus, Simple Interest = $900
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 + $900
= $4650
Thus, Amount to be paid = $4650 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3750 + ($3750 × 8% × 3)
= $3750 + ($3750 ×8/100 × 3)
= $3750 + (3750 × 8 × 3/100)
= $3750 + (30000 × 3/100)
= $3750 + (90000/100)
= $3750 + $900 = $4650
Thus, Amount (A) to be paid = $4650 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3750, the simple interest in 1 year
= 8/100 × 3750
= 8 × 3750/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $300 × 3 = $900
Thus, Simple Interest (SI) = $900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $900
= $4650
Thus, Amount to be paid = $4650 Answer
Similar Questions
(1) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $5712 to clear the loan, then find the time period of the loan.
(2) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?
(4) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 2% simple interest.
(6) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(9) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 7 years.
(10) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?