Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?
Correct Answer
$4687.5
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 5%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 5
= $3750 ×5/100 × 5
= 3750 × 5 × 5/100
= 18750 × 5/100
= 93750/100
= $937.5
Thus, Simple Interest = $937.5
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 + $937.5
= $4687.5
Thus, Amount to be paid = $4687.5 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) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 5% × 5)
= $3750 + ($3750 ×5/100 × 5)
= $3750 + (3750 × 5 × 5/100)
= $3750 + (18750 × 5/100)
= $3750 + (93750/100)
= $3750 + $937.5 = $4687.5
Thus, Amount (A) to be paid = $4687.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3750, the simple interest in 1 year
= 5/100 × 3750
= 5 × 3750/100
= 18750/100 = $187.5
Thus, simple interest for 1 year = $187.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $187.5 × 5 = $937.5
Thus, Simple Interest (SI) = $937.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $937.5
= $4687.5
Thus, Amount to be paid = $4687.5 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(2) Find the amount to be paid if Charles borrowed a sum of $5900 at 8% simple interest for 7 years.
(3) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(4) If Kimberly paid $5580 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) Michelle had to pay $5247 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(7) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 5% simple interest?
(8) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.
(9) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 8 years.