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) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 8 years.
(2) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7616 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 4 years.
(5) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 10% simple interest?
(6) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(7) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.
(8) What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?
(9) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 3 years.