Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 4 years.
Correct Answer
$4144
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 3%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 4
= $3700 ×3/100 × 4
= 3700 × 3 × 4/100
= 11100 × 4/100
= 44400/100
= $444
Thus, Simple Interest = $444
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 + $444
= $4144
Thus, Amount to be paid = $4144 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) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 3% × 4)
= $3700 + ($3700 ×3/100 × 4)
= $3700 + (3700 × 3 × 4/100)
= $3700 + (11100 × 4/100)
= $3700 + (44400/100)
= $3700 + $444 = $4144
Thus, Amount (A) to be paid = $4144 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3700, the simple interest in 1 year
= 3/100 × 3700
= 3 × 3700/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $111 × 4 = $444
Thus, Simple Interest (SI) = $444
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $444
= $4144
Thus, Amount to be paid = $4144 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(2) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(3) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8736 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 7 years.
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(7) If William paid $4200 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 7 years.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 3 years.
(10) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.