Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 4 years.
Correct Answer
$5100
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 9%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 4
= $3750 ×9/100 × 4
= 3750 × 9 × 4/100
= 33750 × 4/100
= 135000/100
= $1350
Thus, Simple Interest = $1350
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 + $1350
= $5100
Thus, Amount to be paid = $5100 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) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 9% × 4)
= $3750 + ($3750 ×9/100 × 4)
= $3750 + (3750 × 9 × 4/100)
= $3750 + (33750 × 4/100)
= $3750 + (135000/100)
= $3750 + $1350 = $5100
Thus, Amount (A) to be paid = $5100 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3750, the simple interest in 1 year
= 9/100 × 3750
= 9 × 3750/100
= 33750/100 = $337.5
Thus, simple interest for 1 year = $337.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $337.5 × 4 = $1350
Thus, Simple Interest (SI) = $1350
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1350
= $5100
Thus, Amount to be paid = $5100 Answer
Similar Questions
(1) What amount will be due after 2 years if David borrowed a sum of $3200 at a 10% simple interest?
(2) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.
(3) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8236 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 4% simple interest?
(5) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(6) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(7) How much loan did Joseph borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6840 to clear it?
(8) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?
(9) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(10) How much loan did Deborah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9312.5 to clear it?