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) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(2) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 8% simple interest?
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 3 years.
(4) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?
(5) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.
(6) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 4 years.
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.
(9) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(10) In how much time a principal of $3150 will amount to $3276 at a simple interest of 2% per annum?