Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.
Correct Answer
$4366
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 6%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 3
= $3700 ×6/100 × 3
= 3700 × 6 × 3/100
= 22200 × 3/100
= 66600/100
= $666
Thus, Simple Interest = $666
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 + $666
= $4366
Thus, Amount to be paid = $4366 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) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 6% × 3)
= $3700 + ($3700 ×6/100 × 3)
= $3700 + (3700 × 6 × 3/100)
= $3700 + (22200 × 3/100)
= $3700 + (66600/100)
= $3700 + $666 = $4366
Thus, Amount (A) to be paid = $4366 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3700, the simple interest in 1 year
= 6/100 × 3700
= 6 × 3700/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $222 × 3 = $666
Thus, Simple Interest (SI) = $666
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $666
= $4366
Thus, Amount to be paid = $4366 Answer
Similar Questions
(1) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 3% simple interest?
(2) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(4) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(5) Lisa had to pay $4657.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(7) If Elizabeth borrowed $3450 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(9) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.