Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 7% simple interest?
Correct Answer
$5325
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 6
= $3750 ×7/100 × 6
= 3750 × 7 × 6/100
= 26250 × 6/100
= 157500/100
= $1575
Thus, Simple Interest = $1575
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 + $1575
= $5325
Thus, Amount to be paid = $5325 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 7% × 6)
= $3750 + ($3750 ×7/100 × 6)
= $3750 + (3750 × 7 × 6/100)
= $3750 + (26250 × 6/100)
= $3750 + (157500/100)
= $3750 + $1575 = $5325
Thus, Amount (A) to be paid = $5325 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3750, the simple interest in 1 year
= 7/100 × 3750
= 7 × 3750/100
= 26250/100 = $262.5
Thus, simple interest for 1 year = $262.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $262.5 × 6 = $1575
Thus, Simple Interest (SI) = $1575
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1575
= $5325
Thus, Amount to be paid = $5325 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
(2) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(3) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 5% simple interest?
(5) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Patricia borrowed a sum of $3150 at 6% simple interest for 3 years.
(7) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 8 years.
(9) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?