Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.
Correct Answer
$4255
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 5%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 3
= $3700 ×5/100 × 3
= 3700 × 5 × 3/100
= 18500 × 3/100
= 55500/100
= $555
Thus, Simple Interest = $555
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 + $555
= $4255
Thus, Amount to be paid = $4255 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) = 5%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 5% × 3)
= $3700 + ($3700 ×5/100 × 3)
= $3700 + (3700 × 5 × 3/100)
= $3700 + (18500 × 3/100)
= $3700 + (55500/100)
= $3700 + $555 = $4255
Thus, Amount (A) to be paid = $4255 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3700, the simple interest in 1 year
= 5/100 × 3700
= 5 × 3700/100
= 18500/100 = $185
Thus, simple interest for 1 year = $185
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $185 × 3 = $555
Thus, Simple Interest (SI) = $555
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $555
= $4255
Thus, Amount to be paid = $4255 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9184 to clear the loan, then find the time period of the loan.
(2) How much loan did Melissa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8085 to clear it?
(3) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 2% simple interest?
(4) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11041 to clear the loan, then find the time period of the loan.
(5) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(6) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(7) If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(10) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 8 years.