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) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 3% simple interest?
(4) How much loan did Ronald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9375 to clear it?
(5) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(6) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 10% simple interest?
(7) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 5% simple interest.
(8) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(9) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(10) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8436 to clear the loan, then find the time period of the loan.