Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
Correct Answer
$4650
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 4%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 6
= $3750 ×4/100 × 6
= 3750 × 4 × 6/100
= 15000 × 6/100
= 90000/100
= $900
Thus, Simple Interest = $900
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 + $900
= $4650
Thus, Amount to be paid = $4650 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) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 4% × 6)
= $3750 + ($3750 ×4/100 × 6)
= $3750 + (3750 × 4 × 6/100)
= $3750 + (15000 × 6/100)
= $3750 + (90000/100)
= $3750 + $900 = $4650
Thus, Amount (A) to be paid = $4650 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3750, the simple interest in 1 year
= 4/100 × 3750
= 4 × 3750/100
= 15000/100 = $150
Thus, simple interest for 1 year = $150
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $150 × 6 = $900
Thus, Simple Interest (SI) = $900
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $900
= $4650
Thus, Amount to be paid = $4650 Answer
Similar Questions
(1) 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.
(2) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 3% simple interest?
(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(4) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 7% simple interest?
(6) Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
(7) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $12308 to clear the loan, then find the time period of the loan.
(8) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.
(9) How much loan did Christopher borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6900 to clear it?
(10) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.