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) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.
(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 4% simple interest for 7 years.
(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 5% simple interest for 7 years.
(4) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(5) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(6) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(7) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?
(8) Find the amount to be paid if John borrowed a sum of $5200 at 3% simple interest for 7 years.
(9) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 9% simple interest?
(10) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.