Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 3% simple interest?
Correct Answer
$4425
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 6
= $3750 ×3/100 × 6
= 3750 × 3 × 6/100
= 11250 × 6/100
= 67500/100
= $675
Thus, Simple Interest = $675
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 + $675
= $4425
Thus, Amount to be paid = $4425 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) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 3% × 6)
= $3750 + ($3750 ×3/100 × 6)
= $3750 + (3750 × 3 × 6/100)
= $3750 + (11250 × 6/100)
= $3750 + (67500/100)
= $3750 + $675 = $4425
Thus, Amount (A) to be paid = $4425 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3750, the simple interest in 1 year
= 3/100 × 3750
= 3 × 3750/100
= 11250/100 = $112.5
Thus, simple interest for 1 year = $112.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $112.5 × 6 = $675
Thus, Simple Interest (SI) = $675
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $675
= $4425
Thus, Amount to be paid = $4425 Answer
Similar Questions
(1) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 4 years.
(2) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 8% simple interest for 7 years.
(4) Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
(5) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.
(7) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 7% simple interest?
(8) 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.
(9) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?
(10) Andrew had to pay $5520 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.