Question:
What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 10% simple interest?
Correct Answer
$5625
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 10%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 5
= $3750 ×10/100 × 5
= 3750 × 10 × 5/100
= 37500 × 5/100
= 187500/100
= $1875
Thus, Simple Interest = $1875
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 + $1875
= $5625
Thus, Amount to be paid = $5625 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) = 10%
And, Time (t) = 5 years
Thus, Amount (A)
= $3750 + ($3750 × 10% × 5)
= $3750 + ($3750 ×10/100 × 5)
= $3750 + (3750 × 10 × 5/100)
= $3750 + (37500 × 5/100)
= $3750 + (187500/100)
= $3750 + $1875 = $5625
Thus, Amount (A) to be paid = $5625 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3750, the simple interest in 1 year
= 10/100 × 3750
= 10 × 3750/100
= 37500/100 = $375
Thus, simple interest for 1 year = $375
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $375 × 5 = $1875
Thus, Simple Interest (SI) = $1875
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1875
= $5625
Thus, Amount to be paid = $5625 Answer
Similar Questions
(1) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
(2) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6258 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.
(4) In how much time a principal of $3100 will amount to $3286 at a simple interest of 2% per annum?
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
(6) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 4 years.
(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(9) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 3 years.
(10) Elizabeth took a loan of $4900 at the rate of 7% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.