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) Find the amount to be paid if Patricia borrowed a sum of $5150 at 2% simple interest for 7 years.
(2) If Karen paid $4740 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Find the amount to be paid if Michael borrowed a sum of $5300 at 5% simple interest for 8 years.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(5) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) In how much time a principal of $3000 will amount to $3450 at a simple interest of 3% per annum?
(7) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 5% simple interest for 7 years.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 4 years.
(10) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.