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) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.
(2) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(4) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 2% simple interest.
(5) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.
(6) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6248 to clear the loan, then find the time period of the loan.
(7) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(8) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 7 years.
(10) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?