Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 9% simple interest?
Correct Answer
$5775
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 9%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 6
= $3750 ×9/100 × 6
= 3750 × 9 × 6/100
= 33750 × 6/100
= 202500/100
= $2025
Thus, Simple Interest = $2025
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 + $2025
= $5775
Thus, Amount to be paid = $5775 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) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 9% × 6)
= $3750 + ($3750 ×9/100 × 6)
= $3750 + (3750 × 9 × 6/100)
= $3750 + (33750 × 6/100)
= $3750 + (202500/100)
= $3750 + $2025 = $5775
Thus, Amount (A) to be paid = $5775 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3750, the simple interest in 1 year
= 9/100 × 3750
= 9 × 3750/100
= 33750/100 = $337.5
Thus, simple interest for 1 year = $337.5
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $337.5 × 6 = $2025
Thus, Simple Interest (SI) = $2025
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $2025
= $5775
Thus, Amount to be paid = $5775 Answer
Similar Questions
(1) If Ashley paid $5278 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 4 years.
(3) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(4) If Thomas paid $4408 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) How much loan did Paul borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8375 to clear it?
(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 4% simple interest for 8 years.
(8) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?
(9) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.
(10) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.