Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 4 years.
Correct Answer
$4800
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 4
= $3750 ×7/100 × 4
= 3750 × 7 × 4/100
= 26250 × 4/100
= 105000/100
= $1050
Thus, Simple Interest = $1050
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 + $1050
= $4800
Thus, Amount to be paid = $4800 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) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 7% × 4)
= $3750 + ($3750 ×7/100 × 4)
= $3750 + (3750 × 7 × 4/100)
= $3750 + (26250 × 4/100)
= $3750 + (105000/100)
= $3750 + $1050 = $4800
Thus, Amount (A) to be paid = $4800 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3750, the simple interest in 1 year
= 7/100 × 3750
= 7 × 3750/100
= 26250/100 = $262.5
Thus, simple interest for 1 year = $262.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $262.5 × 4 = $1050
Thus, Simple Interest (SI) = $1050
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1050
= $4800
Thus, Amount to be paid = $4800 Answer
Similar Questions
(1) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6068 to clear the loan, then find the time period of the loan.
(2) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
(3) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(5) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 4 years.
(6) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(7) If Kenneth paid $6000 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Jennifer had to pay $3445 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) If David borrowed $3400 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.