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) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(2) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?
(3) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $6816 to clear the loan, then find the time period of the loan.
(4) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 5% simple interest?
(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 8 years.
(7) If Daniel paid $4756 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(9) If Jessica borrowed $3750 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(10) How much loan did Steven borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8250 to clear it?