Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 8% simple interest?
Correct Answer
$5550
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 8%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 6
= $3750 ×8/100 × 6
= 3750 × 8 × 6/100
= 30000 × 6/100
= 180000/100
= $1800
Thus, Simple Interest = $1800
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 + $1800
= $5550
Thus, Amount to be paid = $5550 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) = 8%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 8% × 6)
= $3750 + ($3750 ×8/100 × 6)
= $3750 + (3750 × 8 × 6/100)
= $3750 + (30000 × 6/100)
= $3750 + (180000/100)
= $3750 + $1800 = $5550
Thus, Amount (A) to be paid = $5550 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3750, the simple interest in 1 year
= 8/100 × 3750
= 8 × 3750/100
= 30000/100 = $300
Thus, simple interest for 1 year = $300
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $300 × 6 = $1800
Thus, Simple Interest (SI) = $1800
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $1800
= $5550
Thus, Amount to be paid = $5550 Answer
Similar Questions
(1) Emily had to pay $5462.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 10% simple interest?
(3) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 10% simple interest?
(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(6) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 2% simple interest.
(7) Donald had to pay $4770 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) How much loan did Kevin borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8165 to clear it?
(9) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 7 years.
(10) Anthony had to pay $4558 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.