Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.
Correct Answer
$4884
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 4
= $3700 ×8/100 × 4
= 3700 × 8 × 4/100
= 29600 × 4/100
= 118400/100
= $1184
Thus, Simple Interest = $1184
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 + $1184
= $4884
Thus, Amount to be paid = $4884 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) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 8% × 4)
= $3700 + ($3700 ×8/100 × 4)
= $3700 + (3700 × 8 × 4/100)
= $3700 + (29600 × 4/100)
= $3700 + (118400/100)
= $3700 + $1184 = $4884
Thus, Amount (A) to be paid = $4884 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3700, the simple interest in 1 year
= 8/100 × 3700
= 8 × 3700/100
= 29600/100 = $296
Thus, simple interest for 1 year = $296
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $296 × 4 = $1184
Thus, Simple Interest (SI) = $1184
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1184
= $4884
Thus, Amount to be paid = $4884 Answer
Similar Questions
(1) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 7% simple interest?
(2) How much loan did George borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8030 to clear it?
(3) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 10% simple interest?
(4) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 7 years.
(7) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $11390 to clear the loan, then find the time period of the loan.
(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 9% simple interest?
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(10) What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?