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) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(2) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.
(3) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 2% simple interest?
(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 9% simple interest.
(5) Calculate the amount due if Susan borrowed a sum of $3650 at 9% simple interest for 3 years.
(6) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
(8) If Betty paid $4590 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
(10) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 8% simple interest.