Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 3 years.
Correct Answer
$4144
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 4%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 3
= $3700 ×4/100 × 3
= 3700 × 4 × 3/100
= 14800 × 3/100
= 44400/100
= $444
Thus, Simple Interest = $444
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 + $444
= $4144
Thus, Amount to be paid = $4144 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) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 4% × 3)
= $3700 + ($3700 ×4/100 × 3)
= $3700 + (3700 × 4 × 3/100)
= $3700 + (14800 × 3/100)
= $3700 + (44400/100)
= $3700 + $444 = $4144
Thus, Amount (A) to be paid = $4144 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3700, the simple interest in 1 year
= 4/100 × 3700
= 4 × 3700/100
= 14800/100 = $148
Thus, simple interest for 1 year = $148
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $148 × 3 = $444
Thus, Simple Interest (SI) = $444
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $444
= $4144
Thus, Amount to be paid = $4144 Answer
Similar Questions
(1) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
(2) Calculate the amount due if Robert borrowed a sum of $3100 at 10% simple interest for 3 years.
(3) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(4) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 7% simple interest?
(5) 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.
(6) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8507 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 5% simple interest.
(8) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(9) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $11480 to clear the loan, then find the time period of the loan.
(10) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.