Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?
Correct Answer
$4875
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 6
= $3750 ×5/100 × 6
= 3750 × 5 × 6/100
= 18750 × 6/100
= 112500/100
= $1125
Thus, Simple Interest = $1125
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 + $1125
= $4875
Thus, Amount to be paid = $4875 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 5% × 6)
= $3750 + ($3750 ×5/100 × 6)
= $3750 + (3750 × 5 × 6/100)
= $3750 + (18750 × 6/100)
= $3750 + (112500/100)
= $3750 + $1125 = $4875
Thus, Amount (A) to be paid = $4875 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3750, the simple interest in 1 year
= 5/100 × 3750
= 5 × 3750/100
= 18750/100 = $187.5
Thus, simple interest for 1 year = $187.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $187.5 × 6 = $1125
Thus, Simple Interest (SI) = $1125
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1125
= $4875
Thus, Amount to be paid = $4875 Answer
Similar Questions
(1) How much loan did Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?
(2) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 5% simple interest?
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 7 years.
(5) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.
(6) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?
(7) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Richard had to pay $3924 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?