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) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.
(2) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6854 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.
(4) Calculate the amount due if James borrowed a sum of $3000 at 3% simple interest for 3 years.
(5) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9834 to clear the loan, then find the time period of the loan.
(6) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6540 to clear it?
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
(8) If Donna paid $5820 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(10) What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?