Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 3 years.
Correct Answer
$4477
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3
= $3700 ×7/100 × 3
= 3700 × 7 × 3/100
= 25900 × 3/100
= 77700/100
= $777
Thus, Simple Interest = $777
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 + $777
= $4477
Thus, Amount to be paid = $4477 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 7% × 3)
= $3700 + ($3700 ×7/100 × 3)
= $3700 + (3700 × 7 × 3/100)
= $3700 + (25900 × 3/100)
= $3700 + (77700/100)
= $3700 + $777 = $4477
Thus, Amount (A) to be paid = $4477 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3700, the simple interest in 1 year
= 7/100 × 3700
= 7 × 3700/100
= 25900/100 = $259
Thus, simple interest for 1 year = $259
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $259 × 3 = $777
Thus, Simple Interest (SI) = $777
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $777
= $4477
Thus, Amount to be paid = $4477 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(2) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(3) Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 8 years.
(5) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
(6) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 8 years.
(8) Calculate the amount due if David borrowed a sum of $3400 at 6% simple interest for 3 years.
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(10) Andrew had to pay $5232 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.