Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 4 years.
Correct Answer
$4440
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 5%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 4
= $3700 ×5/100 × 4
= 3700 × 5 × 4/100
= 18500 × 4/100
= 74000/100
= $740
Thus, Simple Interest = $740
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 + $740
= $4440
Thus, Amount to be paid = $4440 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) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 5% × 4)
= $3700 + ($3700 ×5/100 × 4)
= $3700 + (3700 × 5 × 4/100)
= $3700 + (18500 × 4/100)
= $3700 + (74000/100)
= $3700 + $740 = $4440
Thus, Amount (A) to be paid = $4440 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3700, the simple interest in 1 year
= 5/100 × 3700
= 5 × 3700/100
= 18500/100 = $185
Thus, simple interest for 1 year = $185
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $185 × 4 = $740
Thus, Simple Interest (SI) = $740
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $740
= $4440
Thus, Amount to be paid = $4440 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(2) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 7 years.
(3) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 7 years.
(4) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?
(5) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?
(7) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 9% simple interest?
(8) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.
(9) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 2% simple interest?
(10) Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.