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) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 8% simple interest.
(3) Joseph had to pay $4144 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(5) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 5% simple interest?
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 2% simple interest?
(7) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.
(8) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 2% simple interest.
(9) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?
(10) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $8268 to clear the loan, then find the time period of the loan.