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) If Ashley paid $5460 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 7% simple interest for 7 years.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.
(4) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(5) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $9512 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(7) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(8) If Jessica paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 4% simple interest.