Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?
Correct Answer
$5437.5
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 9%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 5
= $3750 ×9/100 × 5
= 3750 × 9 × 5/100
= 33750 × 5/100
= 168750/100
= $1687.5
Thus, Simple Interest = $1687.5
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 + $1687.5
= $5437.5
Thus, Amount to be paid = $5437.5 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) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 9% × 5)
= $3750 + ($3750 ×9/100 × 5)
= $3750 + (3750 × 9 × 5/100)
= $3750 + (33750 × 5/100)
= $3750 + (168750/100)
= $3750 + $1687.5 = $5437.5
Thus, Amount (A) to be paid = $5437.5 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3750, the simple interest in 1 year
= 9/100 × 3750
= 9 × 3750/100
= 33750/100 = $337.5
Thus, simple interest for 1 year = $337.5
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $337.5 × 5 = $1687.5
Thus, Simple Interest (SI) = $1687.5
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1687.5
= $5437.5
Thus, Amount to be paid = $5437.5 Answer
Similar Questions
(1) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 4% simple interest?
(2) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 6% simple interest.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(4) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 2% simple interest.
(5) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.
(6) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(7) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 4 years.
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 4 years.
(9) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(10) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 9% simple interest.