Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.
Correct Answer
$4650
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 6%
Time (t) = 4 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% × 4
= $3750 ×6/100 × 4
= 3750 × 6 × 4/100
= 22500 × 4/100
= 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 6% × 4)
= $3750 + ($3750 ×6/100 × 4)
= $3750 + (3750 × 6 × 4/100)
= $3750 + (22500 × 4/100)
= $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 = 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 4 years
= Simple interest for 1 year × 4
= $225 × 4 = $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) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 8% simple interest for 3 years.
(2) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $6936 to clear the loan, then find the time period of the loan.
(3) What amount does William have to pay after 5 years if he takes a loan of $3500 at 9% simple interest?
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 8 years.
(5) How much loan did Linda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5885 to clear it?
(6) Find the amount to be paid if David borrowed a sum of $5400 at 2% simple interest for 8 years.
(7) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 3 years.
(9) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 8% simple interest for 7 years.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 8 years.