Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.
Correct Answer
$3922
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3700 × 2% × 3
= $3700 ×2/100 × 3
= 3700 × 2 × 3/100
= 7400 × 3/100
= 22200/100
= $222
Thus, Simple Interest = $222
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 = $3700 + $222
= $3922
Thus, Amount to be paid = $3922 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 = $3700
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 2% × 3)
= $3700 + ($3700 ×2/100 × 3)
= $3700 + (3700 × 2 × 3/100)
= $3700 + (7400 × 3/100)
= $3700 + (22200/100)
= $3700 + $222 = $3922
Thus, Amount (A) to be paid = $3922 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3700, the simple interest in 1 year
= 2/100 × 3700
= 2 × 3700/100
= 7400/100 = $74
Thus, simple interest for 1 year = $74
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $74 × 3 = $222
Thus, Simple Interest (SI) = $222
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $222
= $3922
Thus, Amount to be paid = $3922 Answer
Similar Questions
(1) If Margaret paid $4698 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(4) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.
(5) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?
(6) 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?
(7) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(8) How much loan did Jason borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9240 to clear it?
(9) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(10) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.