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) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.
(3) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 8 years.
(5) How much loan did Jacob borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9600 to clear it?
(6) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 7% simple interest?
(7) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
(8) Sarah took a loan of $5700 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(9) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 4% simple interest?
(10) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 2% simple interest?