Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
Correct Answer
$3996
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 2%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 4
= $3700 ×2/100 × 4
= 3700 × 2 × 4/100
= 7400 × 4/100
= 29600/100
= $296
Thus, Simple Interest = $296
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 + $296
= $3996
Thus, Amount to be paid = $3996 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) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 2% × 4)
= $3700 + ($3700 ×2/100 × 4)
= $3700 + (3700 × 2 × 4/100)
= $3700 + (7400 × 4/100)
= $3700 + (29600/100)
= $3700 + $296 = $3996
Thus, Amount (A) to be paid = $3996 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3700, the simple interest in 1 year
= 2/100 × 3700
= 2 × 3700/100
= 7400/100 = $74
Thus, simple interest for 1 year = $74
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $74 × 4 = $296
Thus, Simple Interest (SI) = $296
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $296
= $3996
Thus, Amount to be paid = $3996 Answer
Similar Questions
(1) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 8% simple interest?
(2) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 10% simple interest.
(3) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $6314 to clear the loan, then find the time period of the loan.
(4) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $9291 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 4% simple interest.
(6) Find the amount to be paid if Joseph borrowed a sum of $5700 at 7% simple interest for 8 years.
(7) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 10% simple interest.
(9) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $10560 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 2% simple interest for 8 years.