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) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 5% simple interest.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 4% simple interest?
(4) Calculate the amount due if James borrowed a sum of $3000 at 6% simple interest for 4 years.
(5) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
(6) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(7) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(8) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 8% simple interest?
(9) Find the amount to be paid if John borrowed a sum of $5200 at 10% simple interest for 7 years.
(10) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.