Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 4% simple interest for 4 years.
Correct Answer
$4350
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 4%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 4
= $3750 ×4/100 × 4
= 3750 × 4 × 4/100
= 15000 × 4/100
= 60000/100
= $600
Thus, Simple Interest = $600
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 + $600
= $4350
Thus, Amount to be paid = $4350 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) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 4% × 4)
= $3750 + ($3750 ×4/100 × 4)
= $3750 + (3750 × 4 × 4/100)
= $3750 + (15000 × 4/100)
= $3750 + (60000/100)
= $3750 + $600 = $4350
Thus, Amount (A) to be paid = $4350 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3750, the simple interest in 1 year
= 4/100 × 3750
= 4 × 3750/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $150 × 4 = $600
Thus, Simple Interest (SI) = $600
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $600
= $4350
Thus, Amount to be paid = $4350 Answer
Similar Questions
(1) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(2) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.
(3) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 8 years.
(5) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.
(6) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.
(8) If Linda paid $3752 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.