Question:
Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 4 years.
Correct Answer
$5250
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 4
= $3750 ×10/100 × 4
= 3750 × 10 × 4/100
= 37500 × 4/100
= 150000/100
= $1500
Thus, Simple Interest = $1500
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 + $1500
= $5250
Thus, Amount to be paid = $5250 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) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3750 + ($3750 × 10% × 4)
= $3750 + ($3750 ×10/100 × 4)
= $3750 + (3750 × 10 × 4/100)
= $3750 + (37500 × 4/100)
= $3750 + (150000/100)
= $3750 + $1500 = $5250
Thus, Amount (A) to be paid = $5250 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3750, the simple interest in 1 year
= 10/100 × 3750
= 10 × 3750/100
= 37500/100 = $375
Thus, simple interest for 1 year = $375
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $375 × 4 = $1500
Thus, Simple Interest (SI) = $1500
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1500
= $5250
Thus, Amount to be paid = $5250 Answer
Similar Questions
(1) If Mary paid $3660 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?
(3) How much loan did Sharon borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9687.5 to clear it?
(4) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 3% simple interest?
(5) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(7) If Susan borrowed $3650 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 3% simple interest?
(9) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 7% simple interest?
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 8 years.