Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
Correct Answer
$4588
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 6%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 4
= $3700 ×6/100 × 4
= 3700 × 6 × 4/100
= 22200 × 4/100
= 88800/100
= $888
Thus, Simple Interest = $888
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 + $888
= $4588
Thus, Amount to be paid = $4588 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 6% × 4)
= $3700 + ($3700 ×6/100 × 4)
= $3700 + (3700 × 6 × 4/100)
= $3700 + (22200 × 4/100)
= $3700 + (88800/100)
= $3700 + $888 = $4588
Thus, Amount (A) to be paid = $4588 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3700, the simple interest in 1 year
= 6/100 × 3700
= 6 × 3700/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $222 × 4 = $888
Thus, Simple Interest (SI) = $888
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $888
= $4588
Thus, Amount to be paid = $4588 Answer
Similar Questions
(1) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 3 years.
(3) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9685 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.
(5) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?
(6) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 3% simple interest.
(7) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(8) If Patricia borrowed $3150 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(10) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6708 to clear the loan, then find the time period of the loan.