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) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 10% simple interest.
(2) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 9% simple interest?
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
(5) Barbara had to pay $3763 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 7 years.
(7) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 5% simple interest for 4 years.
(9) If Jennifer borrowed $3250 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 Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?