Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 4% simple interest?
Correct Answer
$4500
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 4%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 5
= $3750 ×4/100 × 5
= 3750 × 4 × 5/100
= 15000 × 5/100
= 75000/100
= $750
Thus, Simple Interest = $750
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 + $750
= $4500
Thus, Amount to be paid = $4500 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) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 4% × 5)
= $3750 + ($3750 ×4/100 × 5)
= $3750 + (3750 × 4 × 5/100)
= $3750 + (15000 × 5/100)
= $3750 + (75000/100)
= $3750 + $750 = $4500
Thus, Amount (A) to be paid = $4500 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3750, the simple interest in 1 year
= 4/100 × 3750
= 4 × 3750/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $150 × 5 = $750
Thus, Simple Interest (SI) = $750
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $750
= $4500
Thus, Amount to be paid = $4500 Answer
Similar Questions
(1) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 8 years.
(2) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(4) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 9% simple interest.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(7) If John paid $3840 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 3% simple interest?
(9) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.