Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 3 years.
Correct Answer
$4699
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 9%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 3
= $3700 ×9/100 × 3
= 3700 × 9 × 3/100
= 33300 × 3/100
= 99900/100
= $999
Thus, Simple Interest = $999
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 + $999
= $4699
Thus, Amount to be paid = $4699 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) = 9%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 9% × 3)
= $3700 + ($3700 ×9/100 × 3)
= $3700 + (3700 × 9 × 3/100)
= $3700 + (33300 × 3/100)
= $3700 + (99900/100)
= $3700 + $999 = $4699
Thus, Amount (A) to be paid = $4699 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3700, the simple interest in 1 year
= 9/100 × 3700
= 9 × 3700/100
= 33300/100 = $333
Thus, simple interest for 1 year = $333
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $333 × 3 = $999
Thus, Simple Interest (SI) = $999
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $999
= $4699
Thus, Amount to be paid = $4699 Answer
Similar Questions
(1) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(2) How much loan did Jessica borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6612.5 to clear it?
(3) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 3 years.
(5) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 9% simple interest?
(6) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?
(7) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $8662 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 7% simple interest.
(9) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 5% simple interest?