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) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?
(2) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 9% simple interest?
(3) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Michelle had to pay $5395.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Find the amount to be paid if Robert borrowed a sum of $5100 at 6% simple interest for 8 years.
(6) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 8 years.
(7) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8840 to clear the loan, then find the time period of the loan.
(8) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?
(9) Find the amount to be paid if William borrowed a sum of $5500 at 2% simple interest for 8 years.
(10) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.