Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
Correct Answer
$4033
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 3%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 3
= $3700 ×3/100 × 3
= 3700 × 3 × 3/100
= 11100 × 3/100
= 33300/100
= $333
Thus, Simple Interest = $333
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 + $333
= $4033
Thus, Amount to be paid = $4033 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) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 3% × 3)
= $3700 + ($3700 ×3/100 × 3)
= $3700 + (3700 × 3 × 3/100)
= $3700 + (11100 × 3/100)
= $3700 + (33300/100)
= $3700 + $333 = $4033
Thus, Amount (A) to be paid = $4033 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3700, the simple interest in 1 year
= 3/100 × 3700
= 3 × 3700/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $111 × 3 = $333
Thus, Simple Interest (SI) = $333
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $333
= $4033
Thus, Amount to be paid = $4033 Answer
Similar Questions
(1) If Steven paid $5152 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(3) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.
(5) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.
(7) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 7% simple interest.
(8) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8337.5 to clear it?
(9) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 8 years.
(10) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.