Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
Correct Answer
$4736
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 4
= $3700 ×7/100 × 4
= 3700 × 7 × 4/100
= 25900 × 4/100
= 103600/100
= $1036
Thus, Simple Interest = $1036
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 + $1036
= $4736
Thus, Amount to be paid = $4736 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) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 7% × 4)
= $3700 + ($3700 ×7/100 × 4)
= $3700 + (3700 × 7 × 4/100)
= $3700 + (25900 × 4/100)
= $3700 + (103600/100)
= $3700 + $1036 = $4736
Thus, Amount (A) to be paid = $4736 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3700, the simple interest in 1 year
= 7/100 × 3700
= 7 × 3700/100
= 25900/100 = $259
Thus, simple interest for 1 year = $259
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $259 × 4 = $1036
Thus, Simple Interest (SI) = $1036
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1036
= $4736
Thus, Amount to be paid = $4736 Answer
Similar Questions
(1) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 4 years.
(2) Donna had to pay $5432 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.
(4) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8639 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Charles borrowed a sum of $5900 at 6% simple interest for 8 years.
(6) If Thomas borrowed $3800 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(7) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6930 to clear the loan, then find the time period of the loan.
(8) If William borrowed $3500 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 if Barbara borrowed a sum of $3550 at 4% simple interest for 3 years.
(10) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 9% simple interest?