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) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 10% simple interest.
(2) 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.
(3) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.
(4) How much loan did Donald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8125 to clear it?
(5) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 7% simple interest?
(7) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if David borrowed a sum of $3200 at a 10% simple interest?
(9) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 9% simple interest.
(10) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?