Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 5% simple interest for 4 years.
Correct Answer
$4500
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 5%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 4
= $3750 ×5/100 × 4
= 3750 × 5 × 4/100
= 18750 × 4/100
= 75000/100
= $750
Thus, Simple Interest = $750
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 + $750
= $4500
Thus, Amount to be paid = $4500 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) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 5% × 4)
= $3750 + ($3750 ×5/100 × 4)
= $3750 + (3750 × 5 × 4/100)
= $3750 + (18750 × 4/100)
= $3750 + (75000/100)
= $3750 + $750 = $4500
Thus, Amount (A) to be paid = $4500 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3750, the simple interest in 1 year
= 5/100 × 3750
= 5 × 3750/100
= 18750/100 = $187.5
Thus, simple interest for 1 year = $187.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $187.5 × 4 = $750
Thus, Simple Interest (SI) = $750
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $750
= $4500
Thus, Amount to be paid = $4500 Answer
Similar Questions
(1) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8880 to clear the loan, then find the time period of the loan.
(2) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.
(5) How much loan did Michael borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5830 to clear it?
(6) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10830 to clear the loan, then find the time period of the loan.
(7) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 8 years.
(9) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(10) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6468 to clear the loan, then find the time period of the loan.