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) Mark had to pay $4928 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?
(3) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(4) What amount will be due after 2 years if William borrowed a sum of $3250 at a 10% simple interest?
(5) If Anthony paid $5160 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 8 years.
(7) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 8 years.
(8) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 4 years.
(9) If Anthony paid $4988 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) Patricia had to pay $3622.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.