Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 4 years.
Correct Answer
$4292
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 4%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 4
= $3700 ×4/100 × 4
= 3700 × 4 × 4/100
= 14800 × 4/100
= 59200/100
= $592
Thus, Simple Interest = $592
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 + $592
= $4292
Thus, Amount to be paid = $4292 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) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 4% × 4)
= $3700 + ($3700 ×4/100 × 4)
= $3700 + (3700 × 4 × 4/100)
= $3700 + (14800 × 4/100)
= $3700 + (59200/100)
= $3700 + $592 = $4292
Thus, Amount (A) to be paid = $4292 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3700, the simple interest in 1 year
= 4/100 × 3700
= 4 × 3700/100
= 14800/100 = $148
Thus, simple interest for 1 year = $148
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $148 × 4 = $592
Thus, Simple Interest (SI) = $592
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $592
= $4292
Thus, Amount to be paid = $4292 Answer
Similar Questions
(1) David had to pay $3706 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6956 to clear the loan, then find the time period of the loan.
(3) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 7 years.
(5) If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(7) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 4% simple interest?
(8) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.
(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 8 years.
(10) How much loan did Jessica borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6325 to clear it?