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) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(2) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 8% simple interest?
(3) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8507 to clear the loan, then find the time period of the loan.
(4) If Lisa paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) In how much time a principal of $3050 will amount to $3660 at a simple interest of 5% per annum?
(6) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(7) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?
(8) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?
(10) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 5% simple interest.