Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?
Correct Answer
$5250
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 8%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 5
= $3750 ×8/100 × 5
= 3750 × 8 × 5/100
= 30000 × 5/100
= 150000/100
= $1500
Thus, Simple Interest = $1500
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 + $1500
= $5250
Thus, Amount to be paid = $5250 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) = 8%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 8% × 5)
= $3750 + ($3750 ×8/100 × 5)
= $3750 + (3750 × 8 × 5/100)
= $3750 + (30000 × 5/100)
= $3750 + (150000/100)
= $3750 + $1500 = $5250
Thus, Amount (A) to be paid = $5250 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3750, the simple interest in 1 year
= 8/100 × 3750
= 8 × 3750/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $300 × 5 = $1500
Thus, Simple Interest (SI) = $1500
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1500
= $5250
Thus, Amount to be paid = $5250 Answer
Similar Questions
(1) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?
(2) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 9% simple interest for 7 years.
(4) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(5) Charles had to pay $4251 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.
(7) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(8) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
(9) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(10) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.