Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 2% simple interest?
Correct Answer
$4200
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 2%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 6
= $3750 ×2/100 × 6
= 3750 × 2 × 6/100
= 7500 × 6/100
= 45000/100
= $450
Thus, Simple Interest = $450
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 + $450
= $4200
Thus, Amount to be paid = $4200 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) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 2% × 6)
= $3750 + ($3750 ×2/100 × 6)
= $3750 + (3750 × 2 × 6/100)
= $3750 + (7500 × 6/100)
= $3750 + (45000/100)
= $3750 + $450 = $4200
Thus, Amount (A) to be paid = $4200 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3750, the simple interest in 1 year
= 2/100 × 3750
= 2 × 3750/100
= 7500/100 = $75
Thus, simple interest for 1 year = $75
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $75 × 6 = $450
Thus, Simple Interest (SI) = $450
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $450
= $4200
Thus, Amount to be paid = $4200 Answer
Similar Questions
(1) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 10% simple interest?
(2) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 4 years.
(5) Find the amount to be paid if Richard borrowed a sum of $5600 at 5% simple interest for 7 years.
(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 7% simple interest?
(7) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $10140 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if John borrowed a sum of $3200 at 7% simple interest for 3 years.
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(10) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.