Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 3% simple interest?
Correct Answer
$4312.5
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 3%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 5
= $3750 ×3/100 × 5
= 3750 × 3 × 5/100
= 11250 × 5/100
= 56250/100
= $562.5
Thus, Simple Interest = $562.5
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 + $562.5
= $4312.5
Thus, Amount to be paid = $4312.5 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) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 3% × 5)
= $3750 + ($3750 ×3/100 × 5)
= $3750 + (3750 × 3 × 5/100)
= $3750 + (11250 × 5/100)
= $3750 + (56250/100)
= $3750 + $562.5 = $4312.5
Thus, Amount (A) to be paid = $4312.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3750, the simple interest in 1 year
= 3/100 × 3750
= 3 × 3750/100
= 11250/100 = $112.5
Thus, simple interest for 1 year = $112.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $112.5 × 5 = $562.5
Thus, Simple Interest (SI) = $562.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $562.5
= $4312.5
Thus, Amount to be paid = $4312.5 Answer
Similar Questions
(1) If Michelle paid $5940 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 7 years.
(4) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 4 years.
(5) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(7) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 8% simple interest?
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(9) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 4% simple interest.
(10) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 6% simple interest?