Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
Correct Answer
$4588
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 8%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 3
= $3700 ×8/100 × 3
= 3700 × 8 × 3/100
= 29600 × 3/100
= 88800/100
= $888
Thus, Simple Interest = $888
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 + $888
= $4588
Thus, Amount to be paid = $4588 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) = 8%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 8% × 3)
= $3700 + ($3700 ×8/100 × 3)
= $3700 + (3700 × 8 × 3/100)
= $3700 + (29600 × 3/100)
= $3700 + (88800/100)
= $3700 + $888 = $4588
Thus, Amount (A) to be paid = $4588 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3700, the simple interest in 1 year
= 8/100 × 3700
= 8 × 3700/100
= 29600/100 = $296
Thus, simple interest for 1 year = $296
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $296 × 3 = $888
Thus, Simple Interest (SI) = $888
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $888
= $4588
Thus, Amount to be paid = $4588 Answer
Similar Questions
(1) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 4 years.
(2) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 7% simple interest?
(3) Kimberly had to pay $5068.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 7 years.
(5) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 10% simple interest?
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.
(7) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 8 years.
(8) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10168 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 7 years.
(10) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?