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) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?
(2) Calculate the amount due if Barbara borrowed a sum of $3550 at 8% simple interest for 4 years.
(3) If Andrew paid $5376 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 4 years.
(5) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 7 years.
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 4 years.
(8) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(10) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 9% simple interest.