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) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.
(2) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?
(3) How much loan did Brian borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9000 to clear it?
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 9% simple interest.
(6) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.
(7) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.
(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 2% simple interest?
(10) 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.