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 Donald paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 3% simple interest.
(3) Jessica had to pay $4087.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.
(5) If Michelle paid $5742 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(6) Find the amount to be paid if David borrowed a sum of $5400 at 6% simple interest for 8 years.
(7) If Elizabeth paid $4002 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(8) If Karen paid $4424 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(9) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 10% simple interest?
(10) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.