Question:
What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 10% simple interest?
Correct Answer
$6000
Solution And Explanation
Solution
Given,
Principal (P) = $3750
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $3750 ×10/100 × 6
= 3750 × 10 × 6/100
= 37500 × 6/100
= 225000/100
= $2250
Thus, Simple Interest = $2250
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 + $2250
= $6000
Thus, Amount to be paid = $6000 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3750 + ($3750 × 10% × 6)
= $3750 + ($3750 ×10/100 × 6)
= $3750 + (3750 × 10 × 6/100)
= $3750 + (37500 × 6/100)
= $3750 + (225000/100)
= $3750 + $2250 = $6000
Thus, Amount (A) to be paid = $6000 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3750, the simple interest in 1 year
= 10/100 × 3750
= 10 × 3750/100
= 37500/100 = $375
Thus, simple interest for 1 year = $375
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $375 × 6 = $2250
Thus, Simple Interest (SI) = $2250
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3750 + $2250
= $6000
Thus, Amount to be paid = $6000 Answer
Similar Questions
(1) Calculate the amount due if Charles borrowed a sum of $3900 at 9% simple interest for 3 years.
(2) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 8 years.
(4) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 4% simple interest?
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 7 years.
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
(7) How much loan did Margaret borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7302.5 to clear it?
(8) Donald had to pay $5175 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(10) 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?