Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
Correct Answer
$4810
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 10%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 3
= $3700 ×10/100 × 3
= 3700 × 10 × 3/100
= 37000 × 3/100
= 111000/100
= $1110
Thus, Simple Interest = $1110
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 + $1110
= $4810
Thus, Amount to be paid = $4810 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) = 10%
And, Time (t) = 3 years
Thus, Amount (A)
= $3700 + ($3700 × 10% × 3)
= $3700 + ($3700 ×10/100 × 3)
= $3700 + (3700 × 10 × 3/100)
= $3700 + (37000 × 3/100)
= $3700 + (111000/100)
= $3700 + $1110 = $4810
Thus, Amount (A) to be paid = $4810 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3700, the simple interest in 1 year
= 10/100 × 3700
= 10 × 3700/100
= 37000/100 = $370
Thus, simple interest for 1 year = $370
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $370 × 3 = $1110
Thus, Simple Interest (SI) = $1110
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1110
= $4810
Thus, Amount to be paid = $4810 Answer
Similar Questions
(1) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 3 years.
(2) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(3) If Sarah paid $4620 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(4) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 7% simple interest?
(8) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.
(9) Mark had to pay $4928 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) Calculate the amount due if Richard borrowed a sum of $3600 at 9% simple interest for 3 years.