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) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 4 years.
(2) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?
(3) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 7 years.
(4) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?
(5) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 7% simple interest.
(7) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(9) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 6% simple interest?