Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 6% simple interest?
Correct Answer
$4875
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 5
= $3750 ×6/100 × 5
= 3750 × 6 × 5/100
= 22500 × 5/100
= 112500/100
= $1125
Thus, Simple Interest = $1125
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 + $1125
= $4875
Thus, Amount to be paid = $4875 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) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 6% × 5)
= $3750 + ($3750 ×6/100 × 5)
= $3750 + (3750 × 6 × 5/100)
= $3750 + (22500 × 5/100)
= $3750 + (112500/100)
= $3750 + $1125 = $4875
Thus, Amount (A) to be paid = $4875 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3750, the simple interest in 1 year
= 6/100 × 3750
= 6 × 3750/100
= 22500/100 = $225
Thus, simple interest for 1 year = $225
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $225 × 5 = $1125
Thus, Simple Interest (SI) = $1125
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1125
= $4875
Thus, Amount to be paid = $4875 Answer
Similar Questions
(1) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 8% simple interest?
(2) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(3) In how much time a principal of $3100 will amount to $3348 at a simple interest of 4% per annum?
(4) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 7 years.
(5) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(6) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 5% simple interest?
(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 3% simple interest for 7 years.
(9) If William borrowed $3500 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.